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Underexposed - Canadian Stock Journal


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Underexposed - Canadian Stock Journal

  #511 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014


jackbravo View Post
awesome. i'll take you up on that. i trade some bonds (TLT), eurusd (EC) and airlines (LUV), so I'll bring up some of those charts a bit later on. It still confuses me when teh BB width decreases and what that means...because sometimes , the macd/stochastic are decreasing as well, and it's a true drop rather than a headfake. anyway, i'll bring that stuff up later. good luck with the rest of the shows!

I just have time to answer this excellent question. First of all, BBwidth is an indicator that is related to the distance between the upper and lower Bollinger bands in the main chart. When the BBwidth is falling it means the Bollies are getting tighter...in other words the prices are becoming less volatile...when they are less volatile then they can take off in any direction suddenly (we use the Slow Sto and MACD to give us clues as to the direction)

Lets use our BAC Chart





1. We will work left to right and start with the large blue circle. If you look at the Slow Sto and MACD they have been drifting lower and lower to the end of July...then the price takes a dive on Aug 1.

If this was a REAL BEARISH DIVE... then one would see the BBWIDTH suddenly rise indicating increased volatility.

RULE with a falling Slow Sto and MACD a sudden rise in the BBwidth with a continuing decline of the Slow Sto and MACD indicates a bearish run has started

But look at the BBwidth...not a ripple in movement....this is a Head Fake sign...it is reinforced by the fact the price has closed below the lower BB

RULE when share price suddenly falls...especially if it falls below the lower BB.... look at the BBwidth little or no response (ie . little or no rise in value) usually means this is a head fake and can be disregarded.

The small circle to the left of the large one shows a small head fake of a bullish price breakout .... again the price is above the upper BB, MACD and Slow Sto have solid pos slope... but the up tick on July 7 for the BBwidth died the next day...another head fake.

2. On Aug 20 we had another jump above the upper BB .... head fake?? ... the Slow Sto and MACD looks fine and the BBWidth is right behind it... so this is a real bullish .... The price stays above the upper BB for 3 more days....

RULE a share price that moves above the upper or below the lower BB will re-enter the BB envelope in 2-5 days....and will tend to go to the 20daySMA.

And this did so in the second best way possible...a sideways drift. IS THIS THE END OF THE BULL RUN???

3. Well this requires some judgement calls in careful look at this and other charts to evaluate.... just looking at this chart alone... look at the next blue circle.... SEE how the Slow Sto remains over 80 until Oct 10?? The MACD rises until Sept 25 or so.... it does not matter what the BBWidth does here....hopefully it is dropping back down lower but it does not matter... it is still a hold..... THAT IS it does not matter until ALL THREE INDICATORS are showing a negative slope ... the BBwidth drops then rises then starts to fall again... I like to see the Slow Sto drop lower than 80 and pay little attention to minor rises/falls above 80.

On Oct 8 All three are are falling.....time to sell.... the price will not rise further in the near future.... of course this applies to a swing trade mostly.

4. On oct 10.... the Slow Sto AND the MACD continue falling.... the BBwidth rises..... This is a bear signal

5. it did not last long but it was hard.... but note the MACD/BBwidth.... they are changing direction.... look at the share price ... A way below the Lower BB.... this is a sign of a potential bottom.... it could be only a rest though...if the Slow Sto does not rise strongly above 20.... it is a rest..

6. the dotted green line is a potential bullish rise but I don't like it. The trigger for the BBwidth is a way too high right now, when it falls to 2.5 to 5 for this stock then a major price movement will happen.... if waiting to buy in or add to a holding wait for that major movement when the BBwidth is low... after all it could take a dive further at that point and you don't want to buy until you know for sure it will be a good run.

7. So you are patient and wait til the BBwidth falls to below 5 and sure enough on Dec 5 the bullish trigger is pulled

I hope this helps.

the region between bbwidth trigger signals gives you information that you need to decide weather to sell/hold... when the BBwidth falls to a certain level (different for every stock) then it becomes necessary to watch it closely especially if you are swing trading.... long term depends on other stuff like fundamentals for me.

I hope this answers most of your questions... if not ask again

Good trading....

Gotta go.... curtain at 7:00pm and it is 4:00pm now ....


Last edited by Underexposed; December 9th, 2014 at 07:07 AM. Reason: Improved the language in item #6 to make it clearer
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  #512 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

Christmas videos from the concert

Here is a sample of Christmas choir singing at our concert. I am one of the men in this video. I am a tenor 2 ... I am supposed to hit the high notes but not the highest ones for tenors...I'd need an atomic wedgie to hit those.

Singing in a choir is intensive in work but very satisfying when you get it right. It is a team building exercising too. If your voice stands out and you are not a soloist... you are doing it wrong.

After working at your desk for several hours of the day, the ability to mix with others in such an event and the rehearsals leading up to it adds a measure of balance to one's life. Also as you can see, the ratio of male/female is nice too. Lots of gorgeous women in the group

Christmas Time




We need a little Christmas




Lo, How a Rose E'er Blooming



It takes a long time to rehearse then it is over in 3 performances. Our next performance is at the end of February when we have a "Talent Show". This is a fund raiser for the Choir and gives members a chance to display their individual singing talents. We had 38 singing acts last year in a show that ran non-stop from 7:00pm to 11:00pm and no one left the pub where it is held. The SAIT Gateway pub holds about 450 people and it is sold out every year. Me and another guy sang 2 songs in duet there and one (of a total of 4 chosen) was selected to be sung in the finale for the year in the first week of June ... It was Beatles "Saw her Standing There" (the theme was British invasion.) Everyone had a blast at the pub in this party atmosphere.

I find this recreational hobby grounds me and gives me a balance from the market..... Hope you like the videos they are quite professionally done.

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  #513 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

Status report Dec 10/14


Well the bleeding has not stopped.

Here is the status report.





As you can see, it is another negative week so far but there are 2 days to go so we will be further negative or in recovery.

I laugh at people here that say that my picks are somehow not real.... I certainly don't hide my losses and pretend all is fine.....(just an idle rambling)

Other than the price of oil dropping in a linear fashion there is no fundamental reason for it. Having Canadian banks tank because of the oil price is ridiculous.

Here is the WTIC chart for light oil





No sign of an end to that drop.





All Canadian banks are falling...they are not weak companies...they certainly have outperformed their American counterparts since 2009....that is until now.

The Canadian markets are so commodity driven that solid companies like banks get caught in the collateral damage.

Sell now??? Nopes...too late for that now. These are solid companies and should rebound...when I am not sure. If I was into financially weak companies that would be another story.


I am a little tired of teaching what I do.... I thrive on questions but either I have done an excellent job of outlining the Trigger chart and/or other than a few thank you's that don't really direct my actions, most are content to stay quiet. So I will simply update this portfolio twice weekly for a while and concentrate on other things in my life.

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  #514 (permalink)
SF, CA/USA
 
Experience: Beginner
Platform: SC
Broker: Stage 5
Trading: ES, 6E, sometimes NQ, and occasionally CL
 
jackbravo's Avatar
 
Posts: 1,334 since Jun 2014
Thanks: 4,252 given, 2,379 received

i think that's fair. we'll ask questions as they come. happy Holidays!

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  #515 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

end of week status Dec 12/14

Another bloody week....still hanging tough.... To sell at this point is not in the cards for me I will make decisions on an upturn....Just playing with profits right now...If I was smart enough to catch the fall in the beginning that is another thing but I never thought the decline in Oil price would affect other sectors as much as this has....won't last forever.


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  #516 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

mid-week status report Dec 17/14

Well as the man said falling off the bridge...."so far, so good"

there has been a bit of a rebound but whether it will last or not is debatable. Here is the status report.




A nice mid-week result but nothing much has changed



this is the West Texas Light sweet crude chart and there is little here that suggests the fall has stopped.... so far it looks like a rest for me with the barest hint of a upturn in the MACD and Slow Sto still stuck in the mud. There is no slope change in the BBwidth

a bottom would be shown when the MACD and BBWidth pinched and both indicators go in opposite directions... so far it looks like a rest with further bleeding to come.

Gold is not looking much better.

Not only Russia is hurting and the ruble is falling but the same is happening to Canada.... just a far less extent.

And frankly it will happen to the USA...things seem very tentative right not....the house of cards is getting rather shaky IMHO

you can see here the effect of the global situation on Canada...there may be a recovery...I will wait for it since I believe the next fall will be greater.... maybe not but it does not feel good....spydie nerves tingling...


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  #517 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

Week ending Status Friday Dec 19/14

Well it was as good week... I made back almost all of the losses from the previous week.





I am jaded as to my thoughts if this is sustainable. I am going to have to revisit these stocks...but my opinion of these stocks has not changed much. I really like the Enbridge Income fund and Toronto Dominion Bank I will take a closer look at Lundin Mining especially and Enercare to a lesser extent.

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  #518 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

Limit stop loss orders set

At the time of posting this update it is Monday Dec 22 @6:54 AM MST about 30 mins before markets open here.

I have reviewed this portfolio and have decided that I should set limit stop-loss orders on Toronto Dominion Bank and Enercare Inc.

I changed my mind about Lundin Mining and feel that is ok for now.... TD Bank seems more vulnerable to me hence I will add this order.

ORDERS effective at the start of today's trading

Limit stop-loss for TD Bank [TSX:TD] 400 shares @ price range $52.25 - $52.50
Limit stop-loss for Enercare Inc [TSX:ECI] 2500 shares @ price range $13.70 - $13.80

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  #519 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

the last two business days have been pretty good for the portfolio as you will see tomorrow

I am raising the trailing stops on TD Bank and Enercare as follows:

Limit stop-loss for TD Bank [TSX:TD] 400 shares @ price range $53.45 - $53.50
Limit stop-loss for Enercare Inc [TSX:ECI] 2500 shares @ price range $13.95 - $14.00

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  #520 (permalink)
Calgary Alberta/Canada
 
 
Posts: 934 since Feb 2014

Merry Christmas to all my faithful readers


The trading is over for the day and even though it is a little over 2.5 days the gains have been pretty respectable since that stupid fall at the end of November.

I look at that drop and I wonder if I could take advantage of that dip. To do so, I would have caught it early in the drop and I am not sure I want to play that game.....why? because it takes a lot more continuous vigilance than I am prepared to do.

I do confess to own these stocks in my personal portfolios. Not in the quantities shown some like Enbridge income fund I have much more exposure and am reaping the benefit of that choice others I have about the equivalent exposure.

They are pretty solid stocks and I don't worry about them going to wallpaper on me. So I can pursue other interests in addition to trading.

As a long term trader you have to have a different mindset. If I worried nightly about whether or not I was going to blow my account overnight .... I would be a basket case. I make mistakes in choosing stocks and not every week is a winner as can be seen in the graphic below...but my batting average is pretty good and it is the collective movement of the portfolio that is important to me... not necessarily that of an individual stock. I seem to have a larger tolerance for risk than some here.... and I let a few stocks run longer than I probably should. But I let them run because I believe they will bounce back so that even though individually they have lost money, when they turn around they add to the collective.... in the mean time if I am really concerned of their future, I begin looking for a replacement as I put a trailing limit Stop-loss on the bad guy's tail. As you see, I have done so right now.

If they recover sufficiently I sometimes remove the limit stop-loss as it is not necessary.

Here is the status of this portfolio as of Dec 24





I hope that you can see that Long term trading has merit... but you must choose solid stocks... I prefer dividend paying solid stocks to get double bubble of capital gain + dividends.... also patience is required.

January 1 is not one year for this portfolio...I started this in the first week of February. So I will treat Feb 1 as my fiscal year end..... with any luck I will be 14-15% or so up and that is pretty good considering the rocky road the TSX has had since our Canadian markets are so dominated by energy and mining.

I would imagine some may think that this is luck... What I think I will do is at the end of January I will liquidate this entire portfolio and start again with $100,000.00 ... choosing another suite of stocks.

Then I will demonstrate that my approach is NOT a one year fluke.

Anyway, Have a great holiday season. Rest and comeback with purpose.

Merry Christmas and best wishes
Underexposed

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