Accumulated Knowledge (02/21/2005)

I'm changing up the content of the site a bit. I'll still discuss system trading and continue to post the weekly systems. And I'll continue to develop trading systems. In fact, I've been working on a research intensive trading idea for the past three weeks. Most likely, have another month or so in gathering the data for the system. Then I can start on actually processing the data. But, as far as the site...the frequency of posts and the actual content is going to change.

Due to time constraints, I'll switch from writing posts daily to weekly. Think of it as the beginning of a weekly newsletter. I will also focus more on the big trends that I believe will effect our investing lives over the next 10 years. More of a long-term view on the market and related factors. This will help me in gathering my thoughts on where we are headed. And hopefully, keep me focused on where the money will be made in the coming years. So, let's get started.

One investing theme I like to focus on is anything that involves forced increased spending. Recently the government is forcing the medical establishments hand in getting their records online. Here's a recent article on the governments push. Read here. The main stock I've been following that's taking advantage of this trend is Quality Systems Inc. (QSII). One reason for liking this company is their technology. Most companies in this sector are using some pretty old technology. Making their upgrade path an obstacle. QSII doesn't have this problem and could enable them to be out develop their peers. Here's some recent news on QSII's NextGen subsidiary here. With the likes of Kodak, IBM, Cisco, etc. all getting into this $60 billion a year market...watch out...it could get exciting. Add the 80 million aging baby boomers entering into the overburdened healthcare system and you've now got hospitals being forced to update their systems just for the sake of the numbers being processed through.

Just a wonderful interview on market history from Safe Haven here. John Taylor interviews Bob Hoye of Institutional Advisors. Some of the key points in the interview:

• Bob believes we're in a cyclical bull within a secular bear market. The cyclical bull began in 2002 and Bob believes the top occurred at the end of 2004.


• Bob believes a new financial era begins with a huge ramp-up of inflation in the old era stuff followed by a crash in those commodities that will then begin the setup for the new financial era. After a crash in the new financial era...a long contraction ensues. Every bubble Bob studied, the senior currency became strong. So, Bob believes the US Dollar will rise instead of fall.


• I like Bob's statement in Barron's that "the world is long inflation and short the dollar."


• Interesting that Bob found in every post-bubble the senior currency become strong and gold became strong. Which goes against what has been happening lately with the gold declining on dollar rallies.


• Believes we are in year 5 of a 20 year bull market for gold.


• Take note of his remarks on Jim Rogers and Rogers view on commodities being in a bull market.


• Also read the blurb on Kudlow, Rubin, and Summers.


• Overall, just a great lesson in economic history. An article to read again and again and save for the future."

Speaking of bonds, bubbles, and long rates...read Jack's post on the Greenspan conundrum here. John Mauldin also provides some insight into the conundrum as well via Safe Haven.

Some stock picks from various advisors at the Orlando World Money Show from CBSMarketWatch.com. Read here.

Oil investors take note; the US rig count is near a 19-year high. Read here. Read here for the view that land drillers are considered undervalued to their deepwater brethren. And this article notes how the average offshore rig is 20 years old, it will take more rigs to recover oil at the same rate as now, and today's average well takes longer to drill and yields less oil/gas than a decade ago, all pointing to more rig building to come. Another article draws attention to the fact that no new refinery has been built in the US since 1976. I am long a land driller, so be forewarned.

Housing starts hit a 21-year high last Wednesday. The article points that rising rates will deflate the housing boom. I don't believe this will happen like people expect. I believe rising rates will at first inflate the housing boom even higher as investors scramble to lock-in the historical low mortgage rates. Something else will end up breaking housing's back. What that is...I don't know...but I believe everything is leading up to the tipping point in housing. Most likely just one small news item or event will be the trigger. Then we will all see it ever so clearly. But, until then...housing and land is hot, hot, hot. One thing to pay attention to is the 2nd home market. I think one very good proxy for this market is Jim Walter's Homes stock price. Notice the rocket-like rise in the past year of this home builder. When this building stock gets heated...you know the housing bubble is full-steam ahead.

And last but not least, one way to play the cash-rich oil company play is to go after what they might buy. A recent look through Monster.com provided the following clue. Back in the Y2K crunch, the majority of oil companies purchased SAP systems instead of upgrading their legacy systems. See an old article I wrote on the subject. Back then they didn't buy or upgrade to all the available SAP modules. Money and resources have been the issue. With the recent flow in cash coming back to the oil players...they just might decide to add to their SAP systems. I already know of one oil company doing just that. One thing to know is that most oil companies all follow the same line. Why that is...I have no idea. Maybe its the brother-in-law effect. Just kidding.

Anyway, back when Oracle bought PeopleSoft I really thought Oracle was buying into a declining business. The ERP sector is done. So, be careful in entering this sector. SAP sold off pretty badly due to the Orasoft fiasco. Everyone is waiting and watching what SAP will do or what some company will do to it (ie an IBM or Microsoft). Anyway, this lock on the cash rich oil industry just might be the ticket to increased earnings and attention. Note, I currently do not own SAP stock...but that could change at any time.

Ater reading this post and decide you need a little kick-back and relax time...check out the movie, Constantine. It's pretty good. Heck, I might have to go see it a second time.

Have a great and prosperous week!

Later Trades,

Michael Taylor

Weekly Systems

New System Triggers

• Closing AATK (PennyLag) long position at Monday's Market Open.


• Closing DDDC (PennyLag) long position at Monday's Market Open.

Recently Closed Trades

• none.
  

Current Open Systems

Symbol	System	Entry Date	Exit Date	Profit/Loss%
QQQQ	SimpleUp	1/4/2005	open	-1.58%
AATK	PennyLag	1/5/2005	open	-38.49%
HAUP	PennyLag	1/7/2005	open	-22.08%
DDDC	PennyLag	1/18/2005	open	+25.50%
DCTH	PennyLag	1/24/2005	open	-3.63%
APLX	PennyLag	2/7/2005	open	+13.55%
			Total	-26.73%

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

test this

Testing a new blogging tool.

Mike

Peak Oil, Hospitals, and Market Wisdom

Ran across this rant over at EliteTrader today. Discussion is about peak oil, the sky is falling, I'm right, you're wrong. I always enjoy reading these types of discussions. The participants always get caught up in proving one's self worth and in the process give up some really good insight that could make you a buck or two in the market.

My father-in-law was in the hospital over the weekend and after spending a few hours there...I believe I saw a bit of the future. The hospital was different than most of the hospitals I've been to. They had a nice little restaurant, gift shop containing gifts you'd actually buy, and the entire hospital smelled like a beauty salon. It almost gave you the feeling you were in the mall. And with almost 80 million baby boomers coming into the age of aches and pains...I can see where hospitals will evolve from the traditional diagnose, treat, and release...to providing a level of service never seen before. I wouldn't doubt there would be a local Walgreens in the hospital, food courts, and possibly a movie theater in the future.

Some stats supporting this belief of mine are from a recent BusinessWeek article stating some 22.4 million U.S. households care for someone over the age of 65. In fact, the number of Americans expecting to care for an aged relative is up 25% from 1997. With more people and time spent in hospitals...the greater level of service and amnenities hospitals will need to provide.

Forgive me if hospitals already have these features in your neck of the woods. If so, please enlighten this backwoods boy from Texas. :)

For your information my father-in-law is okay...he passed his heart tests with flying colors. He was able to go home today and you can bet he's already feeling much better. But, please say a prayer or two for my Dad who is undergoing an esophagus test tomorrow morning.

I've recently made a purchase in the oil drillers sector and oil service sector. This is from my 5% of equity "play" money allocation. I've actually been beating my head against the wall for not doing this much earlier in the year...but part of the problem is all my money was tied up in my trading systems. And of course the other part was analysis paralysis. My arch nemesis. :)

Finally some words of wisdom since I seem to have none.

"The man who follows the crowd will usually get no further than the crowd. The man who walks alone is likely to find himself in places no one has ever been." -- Alan Ashley-Pitt

"Be extremely skeptical, and stay with what you know. The great success stores in life are people who figure out what they know, stay with it, put their eggs in that basket and watch it carefully." -- Jim Rogers (Managed the Quantum Fund to a 3,400% gain in 10 years)

"Someone's sitting in the shade today because someone planted a tree a long time ago." -- Warren Buffett

Accumulated Knowledge (02/13/2005)

Sorry for the lack of posts...but I've been doing some research on the local real estate market. And getting some much needed help and insight from Jack and his Old Merrill Pal over at Stocks and Bonds?. If you haven't checked out the Stocks and Bonds? blog...you owe it to yourself to do so. He covers a range of topics from stocks, bonds, real estate, the economy, market history, the list goes on. I'm not kidding in saying Jack has forgotten more than I will ever know. Check it out!

A recent interview from Valero's CEO, Bill Greehey. Looks like 2005 will be another bang up year for the company. I never got around to doing a complete study on the oil refinery business...but do know that the horrific narrowing of the crack spreads seem to be at the refineries back. In addition, any refinery that has taken advantage of heavy crude processing is in the sweet spot. Plus, I stop every day to grab a coffee from one of their Diamond Shamrock stores. :)

A comeback for IO? Their new seismic system sounds interesting. They just need the exploration market to kick into high gear. And to overcome the recent lawsuit.

I can't help but think there's more than a few opportunities presenting themselves in the heartlands these days. Read here on the recent initiatives to keep residents from blowing away. Combine this problem with the recent news here and here on Bush's aim towards cutting government subsidies for grain farmers and you've got a bottom in the making. Ya think?

Interesting article on School Reform and the turnaround background on the NYPD. Read here.

Looking for a good movie or two to see? You must check out In Good Company and Meet the Fockers. If you're a dad with a daughter...then you absolutely have to see In Good Company. Just be prepared to be pulled at the heartstrings. :)

Have a good week everyone!

Daily Systems

New System Triggers

• none.

Recently Closed Trades

• Closed MGF (BreakUp) on the previous Monday's open at +1.20% profit.

Weekly Systems

New System Triggers

• none.

Recently Closed Trades

• none.
  

Current Open Systems

Symbol	System	Entry Date	Exit Date	Profit/Loss%
QQQQ	SimpleUp	1/4/2005	open	-0.66%
AATK	PennyLag	1/5/2005	open	-26.19%
HAUP	PennyLag	1/7/2005	open	-25.00%
DDDC	PennyLag	1/18/2005	open	+60.50%
DCTH	PennyLag	1/24/2005	open	-6.95%
APLX	PennyLag	2/7/2005	open	+13.98%
			Total	+15.68%

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Weekend Update (02/06/2005)

Looking at another house on Monday. Wish me luck.

Have a good week!

Daily Systems

New System Triggers

• Close MGF (BreakUp) long position at Monday's market open.

Recently Closed Trades

• none.
  

Current Open Systems

Symbol	System	Entry Date	Exit Date	Profit/Loss%
MGF	BreakUp	1/19/2005	open	+1.35%
			Total	+1.35%

Weekly Systems

New System Triggers

• Initiate APLX (PennyLag) long position at Monday's market open.

Recently Closed Trades

• Closed CARN (PennyLag) long position at +1.51% profit.
  

Current Open Systems

Symbol	System	Entry Date	Exit Date	Profit/Loss%
QQQQ	SimpleUp	1/4/2005	open	-0.53%
AATK	PennyLag	1/5/2005	open	-24.60%
HAUP	PennyLag	1/7/2005	open	-8.77%
DDDC	PennyLag	1/18/2005	open	+30.75%
DCTH	PennyLag	1/24/2005	open	-0.03%
			Total	-3.18%

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Interest Rates Article

Fantastic article on interest rate increases and their historical effects by Gary Carmell via Safe Haven. He puts together a pretty good "variant perception" of what could happen to the bond market this year. Not sure if I agree with his conclusion but his observations are hard to ignore.

Gary points out that only 4 out of 56 economists believe the 10-year Treasury security will end 2005 at 4.50% or lower.

His chart reflecting Japan's interest rates from 1983 - 2004 and U.S. commercial paper rates from 1921 - 1943 is pretty cool.

Gary has studied over 150+ years of interest rate history and offers the following:

• During the first half of an economic expansion interest rates fall 67% of the time (56% since World War II) and increase 83% of the time (89% post WW-II) during the second half.


• As we transition to recessions rates have risen 80% of the time (70% post WW-II) during the first half and have fallen 97% of the time (100% post WW-II) during the second half of the recession.
  


• Thus, recoveries are aided by dropping interest rates and recessions are typically induced by higher rates.


• Between June 1857 and December 1945, the U.S. was in a recession approximately 44% of the time, or every 27 months with the average duration being 22 months.


• Since 1946 the recession frequency has dropped to 16%, or every 57 months with an average duration of 11 months.


• Our current expansion has lasted 37 months. If recent history is any guide, then we have approximately two years before our next recession.

There are many more great insights into interest rates uncovered in this article. Read the entire article here.

Daily Systems

New System Triggers

• none.

Recently Closed Trades

• Closed FO (BreakUp) back on Tuesday's market open with a +4.88% profit.
  

Current Open Systems

Symbol	System	Entry Date	Exit Date	Profit/Loss%
MGF	BreakUp	1/19/2005	open	+1.05%
			Total	+1.05%

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Grandpa, Cotton, and the Fed Chairman

Usually, I post stock market information...but this link is about commodities. Cotton in particular. I've never traded the futures market. But, I do have a bit of a commodities bug in me. I believe I got it from my grandfather. A man I never met and from the stories told...a man I sure would've liked to have known. He was a cattle rancher and farmer...cotton being one of his favorite crops. I sure wish the new seed technologies would have been around when he was breaking his back in cotton. Read cotton article here. Key points below:

• The Texas cotton harvest is expected to be 7.5 million bales, best since at least 1949. The United States, largely because of the Texas crop, expects a record, too. Worldwide, cotton harvests in many countries will hit records. "Nobody had a crop failure to speak of," says Shawn Wade of the Plains Cotton Growers, which represents West Texas growers.


• A decline in the water table and its quality could have a long-term effect on West Texas cotton growers.


• Genetic engineering of seeds has meant farmers can plant varieties that are drought-resistant or that can thrive in colder areas. The genetic engineering that produces such seeds is one reason U.S. cotton harvests have become more plentiful. "We used to have one seed, and now we have 5,200 varieties," says Candice Poteet, executive vice president of the Texas Cotton Association in Dallas, which represents cotton merchandisers. "If you're planting in an area prone to high winds, you can plant a hearty variety with a thicker stalk."


• That, plus technology such as irrigation, cotton strippers and chemical fertilizers, have helped turn cotton into one of the nation's most successful crops. "Today, we can harvest more cotton in one day than my daddy could in a whole season," says David Jones, 68, a cotton farmer who lives south of Lubbock.


• The USA is the world's largest cotton exporter; China, the largest importer.

On to other topics....here's an article that discusses what I think will become the number one topic of 2005. The replacement of Greenspan. Read here. My favorite quip in the article is from Drew Matus, "Hiring a Fed chairman is like firing a missile. There's no recall button." The article lists the candidates as:

• Martin Feldstein, Harvard professor & president of the National Bureau of Economic Research
• Glenn Hubbard, former head of Bush's Council of Economic Advisors
• Lawrence Lindsey, a former Federal Reserve Governor
• John Taylor, undersecretary of the Treasury for international affairs
• Ben Bernanke, fed governor
• Roger Ferguson, fed vice chairman
• Donald Kohn, fed governor

Do me a favor and review each of the links above. Each one should take you to a picture and bio of the person. Spend a few seconds looking at the picture and glancing at the bio. Make your decision on 1) who you think should be the new Fed Chairman and 2) who will be chosen as the Fed Chairman by Bush. The less you know of these people the better. Mark down your decision and keep it with you. See how your Blink process performs.

Later Trades...

Case of the Muundays

Interesting article from BizJournals.com about Ed Noonan, founder of Contravisory Research & Management Corp. Mr. Noonan focuses on long-term price-trend analysis for the stock market. His work sounds very interesting. If you check out his website you can even find out more in regard to his research and analysis of price trends and their relation to the overall market and sectors.

If you're interested in the entrepreneur side of things...check out BizJournals.com. Each day a couple of stories about small businesses are portrayed. Always interesting and sometimes a good idea generator.

Later Trades...

Daily Systems

New System Triggers

• Close FO (BreakUp) long position at Tuesday's market open.

Recently Closed Trades

• none.

Current Open Systems

Symbol	System	Entry Date	Exit Date	Profit/Loss%
MGF	BreakUp	1/19/2005	open	+0.75%
FO	Breakup	1/24/2005	open	+4.98%
			Total	+5.74%

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Weekend Update

Daily Systems

New System Triggers

• none.

Recently Closed Trades

• Closed QQQQ (ATRBreakBB) long position with a -3.77% loss.

Current Open Systems

Symbol	System	Entry Date	Exit Date	Profit/Loss%
MGF	BreakUp	1/19/2005	open	+0.60%
FO	Breakup	1/24/2005	open	+3.09%
			Total	+3.69%

Weekly Systems

New System Triggers

• Close CARN (PennyLag) long position at Monday's market open.

Recently Closed Trades

• Closed EGHT (PennyLag) long position at -29.67% profit.
• Closed ZICA (PennyLag) long position at +32.49% profit.
• Closed QQQQ (TurtleTrader) long position at -7.78% profit.
  

Current Open Systems

Symbol	System	Entry Date	Exit Date	Profit/Loss%
QQQQ	SimpleUp	1/4/2005	open	-2.71%
AATK	PennyLag	1/5/2005	open	-25.40%
CARN	PennyLag	1/7/2005	open	+2.01%
HAUP	PennyLag	1/7/2005	open	-16.56%
DDDC	PennyLag	1/18/2005	open	-2.00%
DCTH	PennyLag	1/24/2005	open	+18.13%
			Total	-26.53%

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Quick Little Ditty

Ran across an interesting interview with Marc Perkins. Read part1 and part2. Marc tells a great little story on Warren Buffett:

I used to trade with him when I was at Salomon . He was a customer of Salomon back in the early '70s, and I can remember when he was buying bank stocks in 1971, the doggy banks, not the growth stock banks. He was buying Harris Trust. And the Manufacturer's Hanover Trust department called up and said they had a big block of stock in Harris Trust for sale. Buffett had a trader, a fellow by the name of Bill Scott in his office in Omaha. And we called Bill Scott and said, "We got a block of Harris Trust for sale." The stock was around $49 and he said, "I'll pay $47." And so we called Manny Hanny back and told them he said he'd pay $47 and they said, "That's ridiculous, down 2 points. That's crazy." Of course, Harris Trust didn't trade very much, so Buffett was the only buyer around.

So we called Scott back and said, "The seller won't go below the market. They'll sell it for 48.5," and Buffett's response was, "Tell them we're not interested." So, we call Manny Hanny back and say, "There are no bids." "What do you mean no bids?" they say. "Tell 'em I'll sell 'em at 47." So Buffett's guy says, "47 is no good any more. We've gone on to something else and we're just not interested." So the Manny Hanny guy couldn't believe that somebody just walked away. So he now starts calling everybody on the Street trying to sell and the next thing you know, the stock is around 44. And he'd call us back back and ask, "Can you buy it now?" And I would call Buffett back and he would say, "I'll pay 42."

That's his whole deal. Iron-willed discipline. People who know what they know and know what they're good at survive over time.

Marc also reveals one of the wisest pieces of advice anyone has ever given to him:

"The secret to success is knowing when you have enough information to make a decision." - Jim Walter of the Jim Walter Corporation

Here's another post from an edited transcript of a talk by none other than Warren Buffett himself. In it Buffett talks about The Super Investors of Graham-and-Doddsville. Read here.

Well, enjoy the posts and have a wonderful weekend. It's raining here in Texas and a bit nippy. I'm hoping to spend the weekend resting my brain from all the system work I've been performing. Read a few good books: The New Laws of the Stock Market Jungle by Michael J. Panzer, Hot Commodities by Jim Rogers, and Blink: The Power of Thinking Without Thinking by Malcolm Gladwell. And of course, play a few games of CandyLand with my daughter. :)

Later Trades.

Fed Chair History

• Daytraders out there need to check out the action in EAT. The market maker for that stock is making some serious coin.

• The BreakUp system really missed out on the ACV trade. Just one more day would have been really nice. The ACV trade was closed at the open today and then proceeded to surge 5% beyond that opening price.

• Need a little help from my readers. I'm doing some research on the history of Federal Reserve Chairmen. Anyone know the starting month for Benjamin Strong's tenure as Fed Chair?
  

• Also, what's the deal with Ronald Ransom? I believe he died while Fed Chair and then McCabe was appointed. But, don't know the actual tenure timeline or starting month. Review the list below and let me know of any errors.

Federal Reserve Chairman in History
Benjamin Strong (starting month: ?; served: 1914 - 1928)
Marriner Eccles (starting month: February; 1936 - 1948)
Ronald Ransom (starting month: ?; served: ?)
Thomas McCabe (starting month: April; served: 1948 - 1951)
William McChesney Martin (starting month: April; served: 1951 - 1970)
Arthur Burns (starting month: February; served: 1970 - 1978)
G. William Miller (starting month: March; served: 1978 - 1979)
Paul Volcker (starting month: August; served: 1979 - 1987)
Alan Greenspan (starting month: August; served: 1987-current)

Thanks!

Daily Systems

New System Triggers

• Close QQQQ (ATRBreakBB) long position at Friday's market open.

Recently Closed Trades

• Closed QQQQ (MidWeekDrops) long position with a -0.62% loss.
• Closed ACV (BreakUp) long position with a +3.96% profit.
• Closed EAT (BreakUp) long position with a +2.96% profit.
  

Current Open Systems

Symbol	System	Entry Date	Exit Date	Profit/Loss%
QQQQ	ATRBreakBB	1/5/2005	open	-4.08%
MGF	BreakUp	1/19/2005	open	+0.60%
FO	Breakup	1/24/2005	open	+2.83%
			Total	-0.65%

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

John Henry and Airbrushing Models

Very interesting Q & A with John Henry. Read here.

I admire how John has full confidence in his systems...especially in the drawdowns. I'm sure the biggest key to his performance is not deleveraging during heavy drawdowns. By staying fully leveraged he is able to snap back to prior highs. Of course, in the wrong hands this could be another Long Term Capital. So, not only confidence in your system is key...but your system's validity is an even bigger key.

Also interesting how he chooses to deleverage due to profit. And how they will look at various charts priced in different currencies.

That brings up a long-term gripe I have about some forms of technical analysis. I used to eyeball charts...up to 1500 a night. Looking for patterns that matched what I considered to be "winning charts".

The problem with this approach is that many factors change on a stock chart when a stock begins advancing. Splits, dividends, volatility, etc. You look back at a chart and might see a nice tight range then a breakout that leads to a 100% or more movement in price. You get that "aha" moment that you need to look for nice tight ranges and buy the breakouts.

Problem with this approach, is often times those "tight ranges" are only created after a 40% to 50% upward move in the stock.

Split-adjusted stocks are even more fun. They make many stocks look as if they rose from mere pennies when in fact they got their start at a much higher price. Fools several beginning investors into thinking they need to look at penny stocks in order to find the next Starbucks.

Okay, enough griping before I piss off anymore die hard chart readers.

Seriously, I still review charts every night. Always will. There's no better way to tell what's going on with a stock for me. But, realize you're often times looking at a Maxim Magazine cover spread. Airbrush and all. Looks can be deceiving.

Later trades.


Daily Systems

New System Triggers

• Close QQQQ (MidWeekDrops) long position at Thursday's market open.
• Close ACV (BreakUp) long position at Thursday's market open.
• Close EAT (BreakUp) long position at Thursday's market open.
  

Recently Closed Trades

• none

Current Open Systems

Symbol	System	Entry Date	Exit Date	Profit/Loss%
QQQQ	ATRBreakBB	1/5/2005	open	-3.96%
ACV	BreakUp	1/7/2005	open	+1.01%
MGF	BreakUp	1/19/2005	open	+0.60%
QQQQ	MidWeekDrops	1/24/2005	open	+1.03%
FO	Breakup	1/24/2005	open	+2.70%
EAT	Breakup	1/25/2005	open	+4.33%**
			Total	+5.71%

Note: EAT opened late on the NYSE exchange and its very possible the actual opening print was much higher than the $36.52 quoted in the various data providers.

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Bad Fill

Frustrated with my broker today. I decided to take the EAT trade this morning and received a horrible fill at the opening print. Just horrible.

If anyone has a good broker to recommend please pass them my way. To be honest, I don't really need much in the way of online brokerage services. I would even prefer to just call or email my order in. Pretty much the only type of orders I place are market orders at the open. Anyway, if you have a good broker...let me know either via comments or email at mike@taylortree.com. I'd appreciate your input.

Daily Systems

New System Triggers

• none
  

Recently Closed Trades

• none

Current Open Systems

Symbol	System	Entry Date	Exit Date	Profit/Loss%
QQQQ	ATRBreakBB	1/5/2005	open	-5.09%
ACV	BreakUp	1/7/2005	open	+0.57%
MGF	BreakUp	1/19/2005	open	+0.30%
QQQQ	MidWeekDrops	1/24/2005	open	-0.16%
FO	Breakup	1/24/2005	open	+2.94%
EAT	Breakup	1/25/2005	open	+1.92%**
			Total	+0.48%

Note: EAT opened late on the NYSE exchange and its very possible the actual opening print was much higher than the $36.52 quoted in the various data providers.

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Jim Rogers Interview

Check out RealWorldTrading.com's interview with Jim Rogers. Read here. And during my vist to the site I found a nice interview of Charles Cottle. Read here.

Working hard on trading systems development. My eyes are bloodshot, my brain is fried, and I need rest. But, can't stop. My system development juices are flowing again. Yeah!

I will most likely remove the trading system signals for the QQQQ systems. I found some interesting dynamics between the various index systems and I'm now certain these need to be used as an indicator instead of individual systems. So, I'll close the posting of QQQQ systems after the close of the MidWeeksDrops system. Hopefully, in the next few weeks I'll be able to post the indicator chart. That is if I'm still alive. :)

Daily Systems

New System Triggers

• Enter EAT (BreakUp) long position at Tuesday's market open. Note: earnings will be announced Tuesday around 9:00am. This is an event that isn't backtested very well in the BreakUp System. So, I'm not sure I will take this trade. Might be better to watch and learn how the system handles this type of event.
  

Recently Closed Trades

• Closed CB (BreakUp) long position with a -4.09% loss.

Current Open Systems

Symbol	System	Entry Date	Exit Date	Profit/Loss%
QQQQ	ATRBreakBB	1/5/2005	open	-4.21%
ACV	BreakUp	1/7/2005	open	+0.10%
MGF	BreakUp	1/19/2005	open	0.00%
QQQQ	MidWeekDrops	1/24/2005	open	-1.27%
FO	Breakup	1/24/2005	open	+0.87%
			Total	-4.51%

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Weekend Update

Daily Systems

New System Triggers

• Enter QQQQ (MidWeekDrops) long position at Monday's market open.
• Enter FO (BreakUp) long position at Monday's market open.
• Close CB (BreakUp) long position at Monday's market open.
  

Recently Closed Trades

• None.

Current Open Systems

Symbol	System	Entry Date	Exit Date	Profit/Loss%
QQQQ	ATRBreakBB	1/5/2005	open	-4.21%
ACV	BreakUp	1/7/2005	open	+0.10%
CB	BreakUp	1/19/2005	open	-4.09%
MGF	Breakup	1/19/2005	open	-0.15%
			Total	-8.35%

Weekly Systems

New System Triggers

• Enter DCTH (PennyLag) long position at Monday's market open.
• Close EGHT (PennyLag) long position at Monday's market open.
• Close ZICA (PennyLag) long position at Monday's market open.
• Close QQQQ (TurtleTrader) long position at Monday's market open.
  

Recently Closed Trades

• Closed VNWK (PennyLag) long position at +10.14% profit.

Current Open Systems

Symbol	System	Entry Date	Exit Date	Profit/Loss%
QQQQ	SimpleUp	1/4/2005	open	-2.37%
QQQQ	TurtleTrader	1/5/2005	open	-7.65%
AATK	PennyLag	1/5/2005	open	-19.44%
EGHT	PennyLag	1/5/2005	open	-34.20%
ZICA	PennyLag	1/6/2005	open	+29.75%
CARN	PennyLag	1/7/2005	open	-7.38%
HAUP	PennyLag	1/7/2005	open	-16.56%
DDDC	PennyLag	1/18/2005	open	-10.50%
			Total	-68.35%

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Back to the Salt Mine

Sorry for the lack in posts this week. It has been a very busy week. My mind is on other things than this blog or the current market's state. I've been trying to figure out how to code the QQQQ daily systems into an indicator.

I've made some progress the past two nights. But, still much work ahead. So, before I head back to the salt mine...wanted to wish everyone a great weekend.

Later trades.

Daily Systems

New System Triggers

• None

Recently Closed Trades

• Closed QQQQ (TrueRVolume) at Thursday's market open with a -2.66% loss.

Current Open Systems

Symbol	System	Entry Date	Exit Date	Profit/Loss%
QQQQ	ATRBreakBB	1/5/2005	open	-3.44%
ACV	BreakUp	1/7/2005	open	+1.62%
CB	BreakUp	1/19/2005	open	-3.25%
MGF	Breakup	1/19/2005	open	+0.00%
			Total	-5.07%

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Year 2000 Behavior?

Is it just me or does the recent market behavior feel like early 2000? When companies with good earnings got slaughtered. In fact, any good news was sold and sold hard.

I guess what I'm getting at is this type of behavior feels more like a top than a bottom. So, be careful out there.

Later trades.

Daily Systems

New System Triggers

• Closing the QQQQ (TrueRVolume) long system at Thursday's market open.

Recently Closed Trades

• Closed QQQQ (VolSurgeDown) at Wednesday's market open with a +1.23% profit.
• Closed QQQQ (BBLower) at Wednesday's market open with a +0.18% profit.
• Closed WAG (Breakup) at Wednesday's market open with a +6.77% profit.
  

Current Open Systems

Symbol	System	Entry Date	Exit Date	Profit/Loss%
QQQQ	ATRBreakBB	1/5/2005	open	-1.55%
QQQQ	TrueRVolume	1/5/2005	open	-1.55%
ACV	BreakUp	1/7/2005	open	+0.61%
CB	BreakUp	1/19/2005	open	-1.16%
MGF	Breakup	1/19/2005	open	+0.15%
			Total	-3.50%

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.

Busy as a Bee

This promises to be a busy week. Sorry for any lack in posting.

Received a new system trigger for the close-end fund, MGF for Wednesday's market open. This system trigger is from the BreakUp system. I don't like this trade selection. It's not what the system was created for...but these type of instruments have been included in my backtest. So, the BreakUp system can handle it...I'm just reluctant to trade it. I'll add it out there and most likely just track it not trade. I'll think about it more over a good night's rest.

Later Trades.

Daily Systems

New System Triggers

• Closing the QQQQ (VolSurgeDown) long system at Wednesday's market open.
• Closing the QQQQ (BBLower) long system at Wednesday's market open.
• Closing the WAG (BreakUp) long system at Wednesday's market open.
• Opening the CB (BreakUp) long system at Wednesday's market open.
• Opening the MGF (BreakUp) long system at Wednesday's market open.

Recently Closed Profits

• Closed the QQQQ (Tii100Low) on Tuesday's market open with a -0.88% loss.
• Closed the QQQQ (Harami) on Tuesday's market open with a -1.03% loss.
  

Current Open Systems

Symbol	System	Entry Date	Exit Date	Profit/Loss%
WAG	BreakUp	1/4/2005	open	+6.96%
QQQQ	BBLower	1/5/2005	open	+0.10%
QQQQ	ATRBreakBB	1/5/2005	open	+0.10%
QQQQ	TrueRVolume	1/5/2005	open	+0.10%
ACV	Breakup	1/7/2005	open	+1.19%
QQQQ	VolSurgeDown	1/8/2005	open	+1.15%
			Total	+9.60%

*Note, my totals were not correct in previous posts on the daily system tables.

Please read the disclaimer on the website. This is not a recommendation to buy, sell, or trade securities. Just a journal of my travels through Wall Street. I can buy, sell, or hold any positions mentioned on this website at anytime. So, be warned.