"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

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

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