11-18-2013 Trading Journal

Market was up in the morning, bounced around the sea level and then proceeded to submerge under water like it was a submarine.

What can I say?

I thought today would be a non-action day on my part and my portfolio would go up due to $KNDI and $LRAD upticks.  So, what did I do?  I decided to work on other projects instead of watching my portfolio closely.  About 40 minutes before market close, I thought to look at my portfolio to see how high it had increased.

What?!?

Instead of seeing green, I saw red.

Whoa!  $PXD dropped over $10 buck from the high and my once profitable trade had turned into a sea of red ink.  This trade along was responsible for dragging my portfolio down.  Without hesitation, I sold 70% of my position to cut losses and reduce risk.  Nevermind that I sold close to the low of the day, I simply did not want to hold a large position with a momentum that was dropping heavily in the last hour.  Maybe it will bounce tomorrow and maybe not; but I will rather watch the action tomorrow with a lighter size.

PXD_daily

The chart shows that the price action cut thru the daily 5 MA line and is now pointing down along with 15 MA.  It doesn’t lend comfort to see that even the 79 SMA is penetrated.  The only last support is the 89 XMA and the previous pivot low at $181.78.  Thus, I’m definitely OK to get out near the low of the day.  If I had been watching, I might have gotten out sooner but I couldn’t go back in time so it would be pointless to talk about “what if”.

In trading, manage your risk accordingly and your profit will take care of itself.  Abuse the risk and you can kiss your profit goodbye.

$KNDI was going great all day until the last hour also.  All the gain for the day was given back.

KNDI_daily

From the chart, while I’m looking for bounce, it is a bounce against an intermediate downtrend.  That is why I tend to be trigger happy to get out when price begins to exhibit waterfall action inside the bounce day.  Seeing my paper gain evaporated into thin air, I sold 2/3 of my position to lock onto some real gain.  While there seemed to be support at the daily 5 MA line, the long-tail candlestick bar is something I don’t like to see when it is going against my direction.  Better safe than sorry.

$WG did not follow thru with a higher green bar but instead gave me a red bar that dropped more than 50% of the previous day green bar.

WG_daily

The price action was telling me that the upside momentum was no longer the case.  It didn’t help that the 79 SMA was penetrated to the downside and the only support lines are the 89 XMA and the 5 MA lines.  Potentially, we may be looking at a bear flag if price continues the waterfall price action tomorrow.  Thus, I sold 60% of $WG today to take small losses.

$CERS looked the worst in the chart since price action was struggling to climb back above the 79 & 89 MA lines.

CERS_daily

Today drop made it even further below these two lines.  Today closing price is getting dangerously close to the lower range of the recent consolidation.  If this ledge support is taking out tomorrow, it may go even further down. Thus, I unloaded 70% of my position to play safe.

Regardless of how the $KGJI chart looked like today, I’m holding it for the road-show.  $KGJI was struggling due to its being invisible.  Therefore, I’m holding this one for pure fundamental reason.  I like to see if the road-show can bring new awareness and fresh money to take it higher.

$LRAD is a long-term play and I’m not trading in and out of this one.

Due to its being another red bar today, I sold 1/3 of my $AMRN position today.

I meant to sell 50% of $GALE today but punched in the full size position in my sell order by mistake.  Instead of buying back the 50%, I decided to just let it go.

I came into this week 98% invested waiting for a healthy bounce.  Instead of a bounce, I got a last hour waterfall action that put cold water on the bounce.  This tell me that my expectation of a bounce may be too optimistic.  Giving this new information, I had no choice but to lighten up my portfolio by 46%.

Take a look at the daily SPY chart below:

SPY_Daily

You see how today red bar was right at the upper edge of the Bollinger band?  Whenever price corrects near the upper (or lower) Bollinger band, the odd of a correction is high.  This is another one of the reason why I’m quick to raise cash in the last 40 minutes of the trading day.

Obviously, $PXD along with some of my other positions had brought my portfolio down today.

Current holdings:

LRAD, KGJI, PXD, KNDI, AMRN, WG, AUDC, CERS and 46% cash.

My 2 cents.



Categories: Daily trading Journal

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