It's Friday!

I took a few days off this week and will take a few off next week, so I haven't had time to cull through comments and look for charts to post. If I get a few minutes this weekend, I will try to highlight a few trades.

I hope you have wonderful Spring weather wherever you are, and have a great weekend!

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Charts from "comments"

There have been some good trades discussed in the comments over the past few posts. Here are a few charts - please reference the comments of the last post for details. Both trades are from last week.





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More on Instagram

Following up on yesterday's post, this graph is simply amazing. Under 10 employees and 30 million users. New world.



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Facebook buys Instagram

Oh sweet irony - Kodak files for bankruptcy in January, and Instagram is bought for a billion dollars in April. I know their businesses aren't the same, but it is still an interesting statement on old world vs. new world (I'm pretty sure Instagram isn't even two years old).

I can see a bunch of Kodak Executives sitting around the boardroom, perplexed, asking each other "So they built this app for the iPhone, and just sold the company for a billion dollars?"

Facebook buying Instagram for $1 billion in cash and stock

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A trade from Ed...

Ed has posted several trades in comments recently. Here is one from today:

"MRX, 15-minute chart, Fibonacci plotted over the opening range. I entered on a break of the 4th bar's high. The 4th bar was a hammer, and price bounced off the top of the retracement zone and the 5EMA. I exited at the Fibonacci extension for a .35 gain. I hope everyone has a good three day weekend!"

Here is Ed's chart with the trigger bar marked:



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Face the Facts: We Are All Headed For an iDisorder

This is a follow-up to my post last week about smartphones.

"It should come as no surprise that we are all hopelessly addicted to our devices, particularly our smartphones. Why shouldn’t we be? We are now able to carry a powerful computer around 24/7 in our pocket or purse. The new “WWW” really means “Whatever, Wherever, Whenever.” And we are all succumbing to its draw. Just look at any restaurant table and you will see phones sitting next to forks and knives. It is normal to see someone pick up a smartphone, tap tap tap and put it back down while in the middle of talking. Is this healthy or are we all headed down a slippery slope toward what I call an “iDisorder.”

An iDisorder is where you exhibit signs and symptoms of a psychiatric disorder such as OCD, narcissism, addiction or even ADHD, which are manifested through your use — or overuse — of technology. Whether our use of technology makes us exhibit these signs or simply exacerbates our natural tendencies is an open question, but the fact is we are all acting as though we are potentially diagnosable."

I'm not sure if people agree, disagree, or ignore because they see these signs in themselves. For me personally, I'm a bit concerned and becoming more aware of my lack of awareness!

Read the rest here.

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Another trade from David...

"This was similar to my TOL trade last week, but I prefer these three bar setups because they happen faster. 15-minute chart, Fibonacci lines over the first three bars, entry on a break of the third bar high. The third bar was at support from the 50% retracement, the rising 5EMA, and it was a strong bar that closed at its high. I sold at the Fiboancci extension for a .40 gain. There was a "beyond the Fibonacci extension" setup later in the day, good for another .40, but I missed it."

Here is David's chart with the trigger bar marked:



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A Smartphone Future? But Not Yet

A compelling article on what smartphones may be doing to us:

Nicholas Carr, author of “The Shallows: What the Internet Is Doing to Our Brains,” argues in the book that because of the brain’s neuroplasticity, Web surfing rewires people to be more adept at perfunctory multitasking, but diminishes the ability to sustain focus and think interpretatively.

Smartphones are especially pernicious because they “increase the ease of access to the Internet far beyond anything we’ve had with laptops,” Mr. Carr said in an interview over his land line (he also owns a dumbphone, as do the other family members). “You see a similar type of compulsive behavior” to computer-assisted Web surfing, “but it can go on continuously from the moment you wake up to the moment you go to sleep.”

Such constant online status, Mr. Carr said, means that “we stop having opportunities to be alone with our thoughts, something that used to come naturally.”

“Anytime we have a spare second,” he said, “we feel compelled to check what’s going on outside of us.”

I am an avid iPhone owner and user, but these concerns have bothered me for a while. Read the rest here.

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A nice trade from David

"This was a perfect setup, so I couldn't resist commenting. TOL, 15-min chart - price rallied after a gap up, wide range first bar, my Fibonacci lines plotted over the first two bar's range. Price pulled back to the top of the retracement zone and formed a nice "offsetting bars" pattern, and had support from the 5EMA. I entered on a break of the 5th bar's high, and sold at the Fibonacci extension. Classic X setup that worked perfect!!!"

Here is David's chart with the trigger bar marked:



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A trade from John

"I'm not sure if my trades are worthy of highlighting, but maybe it is good for comments section. It is a little similar to the two charts from David and David - classic X type setup, 15-minute chart, Fibonacci over the opening range (symbol = GLUU). The trade is later in the day, however, so I am not sure that X would take it but other readers might have. Also, I use a trendline on this chart. Here are the specifics: Gap up, rally, pullback - the pullback never closed below the 50% retracement. Trendline from the pivot high on the third bar to the 12th bar. Entry was a break of the 2:30EST bar's high - that bar was also a hammer, and price had broken the trendline, and had support from the 8EMA. I closed the trade with a .20 profit which doesn't sound like a lot, but due to the price of GLUU it was actually over 4% gain."

Here is John's chart with the trendline and trigger bar marked (John, if I drew the trendline wrong please let me know in "comments"):



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Another David, another chart!

"X, I have found that these setups tend to work nice: a gap down, and a move back up though the previous day's range, with a setup after a pullback from the high. An example would be DTV from today. 15-minute chart, Fibs over the opening range first three bars, and I entered on a break of the 5th bar high after price had a brief pullback and found support at the 8EMA. The entry signal was what you referred to as "offsetting bars". I sold six bars later when price hit the Fibonacci extension. Just curious if any other X readers trade this kind of setup.

David"



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Yesterday was Goldman, today its Google!

"Why I left Google" - an interesting piece from a former employee on the negative impact that Google+ has had on the company (in his opinion, of course). My favorite quote:

"As it turned out, sharing was not broken. Sharing was working fine and dandy, Google just wasn’t part of it. People were sharing all around us and seemed quite happy. A user exodus from Facebook never materialized. I couldn’t even get my own teenage daughter to look at Google+ twice, “social isn’t a product,” she told me after I gave her a demo, “social is people and the people are on Facebook.” Google was the rich kid who, after having discovered he wasn’t invited to the party, built his own party in retaliation. The fact that no one came to Google’s party became the elephant in the room."

Here is an article about the post, and the actual post itself.

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Why I Am Leaving Goldman Sachs

This is making the round on the Internets today, so you may have seen it. If not, it is worth a read.

"To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for."

Of course, a rational reader will question the motivation of the author. He seems to have made his money at GS, only after which he decides to publicly air dirty laundry. Regardless, it is interesting.

You can find the entire article here.

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A chart and question from David...

"My go-to trade is a variation of an X classic. I trade 15-minute charts and plot my Fibonacci lines over the opening range. I look for a pullback to the 50% level, and a valid candlestick pattern and support from a rising 5 or 8EMA. An example from today is VRML, where I entered on a break of the sixth bar's high. I also trade the "beyond the Fibonacci extension" setups a lot on these types of trades, but for the purposes of this comment I just want to discuss the initial setup described above. I have been trading it for 13 months now, and crunching the data my win rate is around 63%. With good money management, it has been a profitable setup but I am curious if any readers have been able to tweak these to get the winning percentage higher. Feedback is appreciated."

Here is David's chart:



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A message from Michael

"X, I am thinking about offering a service for reversion to the mean trades if there is enough interest. I wanted to post about it in comments, but wanted to check with you first to see if it was ok (don't want to be accused of spamming).

The way I envision the service is that I will post my gap list every morning, then I would post the candidates from that gap list that I am watching as the morning progresses. I would post my thoughts on charts as they formed, and let everyone know what I'm watching, what setups look good, red flags, etc.

What it would not be - I don't want to have a service where I call entries and exits, as that takes the trading responsibility away from the person making the trades. Instead, I want to communicate everything I see; they will have my opinion on the charts, and based on that they can form their own opinions and make a decision on what to trade and when.

Advantages - I've tried a lot of services over the years, and they are usually hard to follow. Since I am trading on a 30-minute timeframe, it should be easier to issue updates and thoughts, and the overall tone will be relaxed and easy to follow (meaning there won't be 100 useless, hard to follow updates every hour). Also, I think I will use something like Yahoo Messenger which will allow me to easily broadcast messages; that way they don't have to monitor a room or wade through chatter that is off topic.

Price - I'm not sure. I am not looking to make a lot of money, only to make it worth my effort. I'm already doing the work, it is just the effort of communicating that work to others. I'm initially thinking something like $25/week, but I need to give it more thought.

As I said earlier, this is dependent on whether I can get enough interest. If people are interested, they can send me an email indicating that to rtmtrades at gmail dot com.

Thanks and let me know if I can make the comment.

Michael."

X note - please address all questions on Michael's proposed service to him via email (provided in his message above), not in post comments. I want to keep post comments focused on charts, trades, and blog stuff. Thanks.

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