Jon's Trading Points Blog Achives
December 2006
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Weekly Roundup - Posted 12-30-06
Our Trades Analyzed
Industry Details and Compare
Next week outlook bias
Our Trades:
A Big part of trading is your bias towards the market climate. Last week, my bias leaned in favor of an up market, Santa Claus rally. This proved to be the wrong way to play, thus limited our gains, as none of our stocks followed through after the initial pop.
What we should have been trading under is “The pop fly rule”. Simply put, after 60 minutes of trading, what ever the morning pop up price is, we fly out of the stock.
Had the “pop fly” rule been in play, we would have locked in $2.35 a share for AKAM, and over .80 cents a share for NVDA for total gain of $3.15 a share for the week in only 4 trading days.
Now, if you been in the stock market any length of time, and realize how fast you can lose money, you will come to appreciate the fact that here at the TradeMechanic, we don’t have to spend time on why we lost more than we should have.
We leave that to the other services that overcharge and under deliver. We get to spend our time trying to figure out how to make more than we did last week.
Our goal is to get in, take a few $100 off somebody’s hands, then get back into cash, every week.
Mission accomplished week ending December 31st.
Industry Best Details:
Friday Dec 29th:
Retail Jewelry up +.83%
Close End Foreign Funds +.60% (Toping list here is China, Indonesia, Cuba, Russia)
Real Estate Development +.58%
Week Ending Dec 29th:
Aerospace and Defense Elec. +1.47%
Apparel Clothing +.29%
Apparel Shoes +.29%
Jon's Notes:
As you can see, our trading performed well against the top performing industry sectors in the market. Only Aerospace was able to move just over 1% for the week.
We want to compare ourselves to the top industries. This way we know if we are out performing or at least keeping up!
I believe, as traders, with the ability to move around, we should be able to a least perform as well as the top industries each week.
Next week:
Next week the subs are out and the starters are back in. As of now, no "pop fly rule" in play for the Trademechanic.
The market bias is still to the upside, thus we will play it that way until otherwise notified.
The market doesn’t open until Wednesday, and we are in cash by close of Friday, so we need a stock to carry over a day or two in order to lock in a good week.
Watch for the Fed minutes for December and Unemployment figures, this data will set the tone for January. Also, some companies start to report earnings. All these things combined with profit taking on 2006 gains, and the fact the market has been up a bunch, could send January into a tail spin fast.
Commodities were under pressure year end as big hedge funds who lost billions betting on oil and gas, had to sell. The amounts they lost in oil are staggering and have put many of them out of business. Considering the stock market was up 16%, makes it even a tougher pill to swallow.
With OPEC cutting production next week, might see a push higher in this group, maybe. I have pulled segements of the oil industries out of our universe of stocks to trade because of their break down.
What ever happens, we will play it as is, with no bias towards one group or another, market up or market down.
We can play any game, just need to know the rules! | 
