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"Find the Bottom (Christmas comes Early)
God I love this world. I held ticker PLX way too long, sold it at $7.2 for a 10% loss. The mistake is easy to see, my pattern is to buy after a continuous 40% loss at a 45 deg angle, combined with a spike in volume. I bought PLX at $8.05 (not $8.5) and that's only a 30% fall. I fell for the false bottom. It's harder for me to stay disciplined than you might think, and go for the first pattern that shakes it's pretty little volatility my way. But I had two nice patterns on my watch list this Monday morning tickers ZLC and IRE. I chose IRE and made an almost perfect buy, catching the falling knife as it hit or passed through the 40% threshold. I bought 5000 at $6.68, it peaked at $8.20 finishing at $8.04 for one day gain of 20%. The other ticker, ZLC, bounced for ...30%, sorry I missed it. It should be very interesting to print out these two patterns and set them side by side. These two and NLST are very nice and should be printed out while you can still get the day to day charts. IRE http://www.prophet.net/quotes/quoteP...d&frequency=i5 ZLC http://www.prophet.net/quotes/quoteP...d&frequency=i5 NLST http://www.prophet.net/quotes/quoteP...d&frequency=i5 "Jonathan" wrote in message ... "Jonathan" wrote in message ... 12-9-09) Ticker NLST today bounced for almost 20%, yielding what would have been a down payment on a modest house, but I sold it .....yesterday. A really beautiful pattern. With a transient length of over 20 days with no sign of returning to the previous equilibrium any time soon. Transient length is the time between the initial disturbance that is driving the system far from equilibrium, and the time one can no longer tell the disturbance happened. The greater the complexity/uncertainty, the longer the transient length, and greater volatility in general. With emergent patterns of all kinds showing up when far from equilibrium. Most of these patterns are best seen in a 20 day chart, which few places provide. Enter the ticker and in the drop down box on the right click 'snap chart'. And then the 10 day option for this ticker, and 20 day for most others. The chart length should match the transient length, or start a couple days before the disturbance. That's how to keep the pattern scale independent, basing the chart time period on transient length. This pattern works at any scale from days to years. http://www.prophet.net/analyze/sc.jsp?symbol=NLST So I'm sticking to yesterday's purchase, PLX, for another day. While keeping a close eye on NLST. Although in general it's best to move on if you missed the bounce at the bottom. "Jonathan" wrote in message ... So I took the morning bounce of NLST at $4.75 for yet another ho-hum 5%. If/when NLST drops below $4 I may revisit it. Meanwhile doing a screen at lunch I bought 5000 of PLX at $8.5. Looking to shoot the gap back up to $9 or so. "Jonathan" wrote in message ... NLST never dropped below $4, so very late Friday I bought 8500 shares at $4.53. Looking to ride an opening bounce on Monday morning as far as I can. Then jump out and wait for the volatility to provide another opportunity. We'll see. "Jonathan" wrote in message ... "Jonathan" wrote in message ... This ticker, ABIO, just had too little volume, otherwise I'd hang on and see what happens next week. So I sold early at $2.90 for another modest 5%. Both of these patterns have been rather weak. The first, BCRX, had the final fall take place during Thanksgiving week which seemed to slow it's fall and cause an early and weak bounce. Plus the huge gap below probably has drawn in a lot of short selling. So I screened and found this pattern, NLST. Higher volume and much higher volatility. With huge gaps above and below inviting surges in volume. http://bigcharts.marke****ch.com/qui...req=7& time=3 Looking for a large increase in volume that shows the trend reversal somewhere around $3.75. A spike in volume is the better indicator than any particular price with this kind of potential volatility. Wait and watch for an obvious entry point, don't predict. This one looks rather exciting, nice buzz about it with the first ever 16gb server memory chip. And a lawsuit thrown in to further increase uncertainty. Uncertainty equals volatility. Volatility equals opportunity. Sure wish I bought in last month, from 75 cents to $7.50 in two weeks. Gotta love this world, we live in the best times ever. s Early market trading showed resistance around $8.50, so I sold first thing at $8.43. Rather disappointing, just under 5% return in the five hours or so I held the stock, for a below average return of about 1% per hour. I did a screen and found ticker ABIO ripe and ready. http://bigcharts.marke****ch.com/qui...eq=7& time=18 A 40% fall puts the bottom at about $2.7. This is a low volume ticker so I bought only 5000 shares early this morning at an ave. of $2.76. Last Monday, when ticker BCRX was at about $9 I predicted it would bottom out at $7.5. Today it bounced off $8 twice ( a nice round number) so I bought 5000 shares at an average of $8.05 before lunch. I'm nervous it might still fall as low as $7.5 before bouncing. But one always looks for the /spike in volume/ at the bottom to show the transition from selling to buying. The late spike in volume gives me reasonable confidence now that the bottom will be $8. What a pretty pattern/transient! Driven by uncertainty. A system being pushed far from equilibrium by the uncertainty of what the price should become after the dilution. I'm tying to demonstrate the /benefits/ of learning how to quantify ...uncertainty, and it's profound effects on real world complex dynamic systems. http://bigcharts.marke****ch.com/qui...eq=7& time=18 Looking for a ten percent gain by the end of the week. Let's see. Already up a grand. With any luck Wednesday morning might see a large gap up first thing. Can't wait! "Jonathan" wrote in message news:... (Monday, November 23, 2009 7:06 PM) Take a look at this absolutely beautiful example of a panic sell in progress. http://bigcharts.marke****ch.com/qui...eq=7& time=18 The transient (disturbance) clearly begins Tuesday morning and the previous close was about $12.25. The transient is a result of the news that this company just sold 5 million shares to some big investor at a price of $9.75. A classic sell off due to stock dilution. Notice how many people thought that $9.75 was the bottom....oops...it kept on falling past the /discounted price/ the /large investor/ was just given. Typically large investors get a 20% or so discount for the big buy. So, the big question is, where will the bottom be? Predicting the future of a real world complex dynamic system, comprised of hundreds of investors, thousands of employees and dozens of competitors is perhaps the hardest prediction to make of all And this particular system is also in the midst of a panic/chaos. How can we predict the future behavior of a complex dynamic system whose internal working formulae are unknown? How can we predict what most would consider a chaotic (panic) situation without any internal detailed knowledge? It's easy! On a 2d chart a self organizing system is denoted by a scale independent slope of -1, with a total fall of 50%. (Why is another post) Adjusted for real world behavior. Which in this case means a very reliable 'false bottom' a bit more than halfway down, and a total fall of some 40% as investors tend to anticipate and jump half-off gun. A 40% drop starting at $12.25 returns a bottom of about $7.35. But investors also like round numbers. So I say the bottom will be $7.50. With a quick bounce back to $8.50, which is where the transient ends. And the system returns to it's normal behavior, whatever that is. Give it a couple of days, and we'll see. s |
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"Find the Bottom (Corrected url's)
The ....correct urls. IRE http://www.prophet.net/quotes/quoteP...d&frequency=i5 ZLC http://www.prophet.net/quotes/quoteP...d&frequency=i5 "Jonathan" wrote in message ... God I love this world. I held ticker PLX way too long, sold it at $7.2 for a 10% loss. The mistake is easy to see, my pattern is to buy after a continuous 40% loss at a 45 deg angle, combined with a spike in volume. I bought PLX at $8.05 (not $8.5) and that's only a 30% fall. I fell for the false bottom. It's harder for me to stay disciplined than you might think, and go for the first pattern that shakes it's pretty little volatility my way. But I had two nice patterns on my watch list this Monday morning tickers ZLC and IRE. I chose IRE and made an almost perfect buy, catching the falling knife as it hit or passed through the 40% threshold. I bought 5000 at $6.68, it peaked at $8.20 finishing at $8.04 for one day gain of 20%. The other ticker, ZLC, bounced for ...30%, sorry I missed it. It should be very interesting to print out these two patterns and set them side by side. These two and NLST are very nice and should be printed out while you can still get the day to day charts. IRE http://www.prophet.net/quotes/quoteP...d&frequency=i5 ZLC http://www.prophet.net/quotes/quoteP...d&frequency=i5 NLST http://www.prophet.net/quotes/quoteP...d&frequency=i5 |
#3
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"Find the Bottom (Follow up)
So I sold IRE after the second bounce at $8.19 for a three day gain of about 25%. Good things comes in 2's btw. If this emergent pattern doesn't interest you, then you officially have no greedy-bone at all. IRE 5 day chart http://www.prophet.net/quotes/quoteP...d&frequency=i1 When far from equilibrium, then spontaneous cyclic order emerges. Especially when system uncertainty (complexity) is near the peak, which is a system in transition, where no one can really tell what the final outcome will be. Uncertainty (complexity) is the Great Attractor. NLST, the one I sold on Dec 17, the day before it jumped some 50% over the next two days, is in the process of forming my pattern. It's dropped about 25% with a clear false bottom. If it should resume dropping next week to about $4, letting a spike in volume fine tune that number, then it's a golden buy again. NLST http://www.prophet.net/quotes/quoteP...d&frequency=i5 I haven't been trading for many months, and I'm starting to feel like I'm dialing it in. This is so much fun. Deserves a rant.... "Quantifying Complexity Theory" "Self-Organizing Complexity (Type 4)" "Our final form of complex system is that believed to comprise the most interesting type and the one most relevant to complexity theory. Here we combine the internal constraints of closed systems (like machines) with the creative evolution of open systems (like people)." http://www.calresco.org/lucas/quantify.htm (Gee, ya mean like the stock market?) The concept behind this pattern is so simple, it's just what Nature does relentlessly to create all known order. By chance, a near equilibrium system is suddenly disturbed by an outside force. If the disturbance is 'complex', the system develops internal mechanisms which continue the push far from equilibrium until it finds it's ultimate boundaries or limits in possibility. "Complex" meaning that the level of the disturbance creates the greatest level of uncertainty as to the size of the effect. Either top or bottom, either good news or bad, either can cause the system to find it's firmest support or resistance levels for that point in time. It's opposite extremes in possibility space, bouncing quickly off each opposing limit, allowing it to settle on the optimum middle. To self-organize and evolve. But not the technical limits based on floats and PE etc or any real facts, but the limits in behavior as defined by the current market forces (opinions). And with weather-like (subjective) accuracy and validity. Which is to say for just a few days, and when the system is at it's highest level of volatility/complexity/uncertainty such as squall lines, thunderstorms and tornadoes etc, then order and predictability increases. But when the sun goes down, or the transient ends, that pattern is over and predictability is lost. Predicting the real world is simply a matter of learning how to subjectively quantity the total level of system uncertainty. At the highest levels, the behavior becomes universal and predictable. The equation which gives the highest theoretical level of system uncertainty is found in things like the face of the Mona Lisa. Where all primary driving system forces are midway between their opposite extremes in possibility. Forcing each observer to subjectively define the system. A system which completely fails to define itself would allow two equal and opposing camps to form. Providing the needed volatility to continue the drive from equilibrium and to the maximum limits possible. With the Mona Lisa, for instance, the total uncertainty created by the poorly defined expressions are so elegant as to perhaps provide one of the best examples or definitions of Art. The 'equation' can be seen in a democracy, where no one can really tell which opposite extreme dominates, the rule of law, or freedom. Or in a cloud, where neither opposite extreme or driving force, condensation vs evaporation, wins. That kind of elegant system uncertainty driven volatility drives self organization, and spontaneous order of all things .....physical or living. Black holes and Life are mathematically related by power law (inverse square) dynamics. Both have larger basins of attraction with higher peaks. And any object following a random path is more likely to fall into the larger basin of attraction than smaller. Whether hill climbing or gravity wells, both follow inverse square law behavior. Both are equally rare, and both are....ABSOLUTELY INEVITABLE. Given enough 'complexity' and time. Jonathan "O Nature, and O soul of man! how far beyond all utterance are your linked analogies! not the smallest atom stirs or lives on matter, but has its cunning duplicate in mind." Captain Ahab http://etcweb.princeton.edu/cgi-bin/...0.html?118#mfs "Jonathan" wrote in message ... The ....correct urls. IRE http://www.prophet.net/quotes/quoteP...d&frequency=i5 ZLC http://www.prophet.net/quotes/quoteP...d&frequency=i5 "Jonathan" wrote in message ... God I love this world. I held ticker PLX way too long, sold it at $7.2 for a 10% loss. The mistake is easy to see, my pattern is to buy after a continuous 40% loss at a 45 deg angle, combined with a spike in volume. I bought PLX at $8.05 (not $8.5) and that's only a 30% fall. I fell for the false bottom. It's harder for me to stay disciplined than you might think, and go for the first pattern that shakes it's pretty little volatility my way. But I had two nice patterns on my watch list this Monday morning tickers ZLC and IRE. I chose IRE and made an almost perfect buy, catching the falling knife as it hit or passed through the 40% threshold. I bought 5000 at $6.68, it peaked at $8.20 finishing at $8.04 for one day gain of 20%. The other ticker, ZLC, bounced for ...30%, sorry I missed it. It should be very interesting to print out these two patterns and set them side by side. These two and NLST are very nice and should be printed out while you can still get the day to day charts. IRE http://www.prophet.net/quotes/quoteP...d&frequency=i5 ZLC http://www.prophet.net/quotes/quoteP...d&frequency=i5 NLST http://www.prophet.net/quotes/quoteP...d&frequency=i5 |
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