Wednesday, October 01, 2008

Dummy Gapper Trade - Energy Conversion Devices, Inc. (Public, NASDAQ:ENER)

The senate vote on the rescue package could have some tax legislation for solar/wind so all the solar names gapped up this morning. It was a fade, but ENER set up a low risk, dummy long midday. NRIB (NR7) for a retest of the ORH. Took a chance on a C&H forming in the afternoon.

I hate when companies release significant, market moving news during regular trading hours. I had almost reached my second level target on this E-mini NASDAQ futures short when the GE/Buffet deal was announced.

8 comments:

Rick said...

Good news courtesy of Reuters about SEC's decision:

* Said its short sale ban on financial stocks will now expire on the third business day after U.S. legislation is enacted, and will not be extended beyond October 17.

I think we'll see an increase in volume and decrease in volatility once the ban is lifted and the hedge fund's turn their arbitrage and quant systems back on. I haven't seen a clean C&H since the ban.

Rick

Anonymous said...

Hey Jamie,

Currently, what is the approx. split between your stock and futures trading?

Jamie said...

Thanks Rick,

Great news! I hope the house passes the bill on the next vote so that we can get back to normal asap.

Jamie said...

Hey Jim,

Before the ban on shorting about 80/20 stocks/futures. More futures trading now. It would be great to just focus on two charts, but I'm not good enough for that yet.

QQQBall said...

entry was 61.8% trader-x fibbo.

anarco said...

Hey Jamie~
I was studying you ENER chart and noticed that for your first entry, the 3min and 5min charts print a great deal of upper shadows after price crosses the high of the previous day (although the bars just before your entry are bullish). And the 15min and 1min charts look good. Since I know you look at D, 15, 5, and 1 min charts, did that bother you in the case of this trade? And also, in general, how do you deal with situations in which different time frames give you "conflicting" data?
Thanks in advance!

Jamie said...

Anarco,

I didn't look at the 3 min. when I took the entry and on the 5 min. I placed my buy stop above the shadows and above the outside bar 15 min. It didn't bother on this setup, because in my mind the setup met all of the main criteria for a successful trade. I don't always cover my shadows when price is basing at the whole dollar level, but yesterday was sort of bearish and I wanted to be cautious.

I used to have checklists of criteria for each setup I was trading. Not to check off each time, because that might cause a missed trade, just as an aid to memory. For example, a NRIB (NR7) in a trending stock (long) should have a flat base on the 1 minute. I want to see volume contraction, and ideally, a tight, narrow candlestick formation. Price should be above all MAs and 5/10/20 MAs must be in tight formation on the lower time frame. On 15 min. price should be close or touch 5 ema. If price is basing at the whole or half $ figure, that's a plus.

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