Intra-day Action

Stats from yesterday:

Tuesday stats

There were a lot of stocks making new “10 month” highs yesterday, which for me really isn’t that encouraging.  I would much rather see 12 month highs and good strength.  The numbers show some strength, but underneath the stats above I am seeing a bit of weakness and indecision particularly in techs and financials which have been fuelling the fire lately.  Services and consumer were strong yesterday on the back of consumer spending.

As the market grinds to new highs it is interesting to note that yesterdays participation was significantly weaker than the up days on the 19th and 21st.  The ranges in a list of 10 stocks I keep advanced stats on were insightful: higher on materials on the drop (all with increased dollar volume too), narrower in financials (also with shorter DV) and much lower in techs.

Interesting DV action in these stocks at the moment:

Dollar Volume changes of note

WAG, EXC, HD, ITW, EMR, ITUB, OI and NKE looking interesting going into today, but I will continue to monitor my core list of swing stocks from this weeks Crystal Balling post.  Market about to open up with futures up 1.75 points at the moment.  Charts will actually follow today (got sidetracked yesterday with physio and football).

Update 10:45 US

This market is a total chop fest this morning.  Very weak looking opening before home sales and oil numbers causing a big hard bounce on small volume for most stocks before the market started to stall.  Same thing happened today with these numbers as the consumer confidence numbers yesterday.  At the moment there seems to be no bad news, and when all the news is good and the market either edges up slightly or sells a little; imagine what will happen when some bad news hits the screens?

Statistically, yesterday was pretty poor and that showed in the opening.  Breadth was bad until the numbers came out.  Good job I don’t trade oil at all as I would have been chopped up.

Airlines have been performing well the past few sessions, but I spied this on JBLU:

Bearish wedge on JBLU

My RTN and ERTS trades cancelled each other out yesterday.  Covered ERTS by accident on a planned “make it and take it lower” limit order.  I stopped out on RTN for a small hit after the sector showed relative weakness.  Good exit on RTN as it has been dumping since.  Bit peeved on ERTS but c’est la vie.

I’m short ITUB, was up nicely this morning and was all going to plan until the spike in the markets.  I was stopped out flat for a half and continue to hold a half position short at $18.82.  The setup was from this:

ITUB short

I was actually planning to short this yesterday at $19.30 yesterday, but I had to leave for a physio appointment at 1700BST.  Double top forming with negative divergence with little buying demand.  Secondary pattern of ascending wedge was broken this morning at the open where I shorted.  Realistically looking for someting around $17.50.

$18.60 is a short term support level as shown by the candlestick formation and former flag breakout last week.

I like this bounce on declining volume, and the divergence continues to be negative.  Let’s see if this starts to show some weakness.

Industrials are the weakest sector by quite a bit today.

Update 19:20 US

This JBLU trade was so implied it wasn’t even funny.  Ultra high probability trade.  Time to cover half.

Trades do not get easier than this

NYSE breadth today

NYSE breadth has been weakening since the “oh wow it’s summer and people buy houses in summer so new home sales are up wow what a shock” news earlier in the day.

Intra-day Action

Futures up nicely with 30 mins before the open, however I’m expecting these to pullback a few points to the 1022-1026 range (currently 1032). Slightly higher open from what I can see in the financials. Today I will be managing my trades in RTN (long) and ERTS (short) while also watching the rest of the stocks on this weeks watchlist.

Elsewhere on my larger tracklist, VALE and PX look quite interesting. Vale with fairly strong overhead at $21 with support levels at $20.40 and $20. Check the daily and 15min charts on that one.

PX is looking very choppy at $79 and I’m waiting for a sell-off or breakout here.

In the shorter timeframe, BTU at $36 and MEE at $40 are also catching my eye, so I will be watching the materials and coal sectors today. Let’s also see if the short term double top in MOS pans out. Charts and intra-day analysis to follow after market opens.

Crystal Balling

Excellent day on Friday, here are the end of day statistics.  All sectors rocking out on nice volume.

Friday statistics

Lots of things on my radar for next week in terms of setups, the majority of which are bullish.  Mostly based on the daily and 15min charts, so check the one I don’t include for another perspective if any of the tickers catch your eye:

ITUB	MOS	CAKE	ERTS	MEE	CAG
DIS	OI	CSX	RTN	KMB

MOS:

Short term ascending triangle with overhead resistance in the $55.50 region.  Full moving average support, however Friday formed an indecisive candlestick with the stock down 0.02% on the highest dollar volume of the week.  I will be watching this for a breakout or retracement after breakout and don’t intend to short.

DIS:

Since the March recovery, Disney has performed well with two nice continuation patterns.  At the close on Friday, Disney is on the verge of a breakout from the third consolidation range in what is a very similar setup to  what happened in April.

Disney range

Quadruple bottom support with triple top resistance ($25 and $28).  Nice range trading here, however the volume has been strong the past few days and I anticipate a breakout.  Full MA support

CAKE:

Looking for continued strength in CAKE this week which has the early signs of a breakout.  Psychological resistance area of $20 is an area to watch this week, pullback to $18.50 would be a a good RRR trade.

Cheesecake up 6%

ERTS:

Bad earnings in sector shoving EA down.  Classic bear flag formation at the moment with a small bounce on tiny buying pressure. Similarly to CAKE, ERTS has tested the $20 level as resistance (prior support) and looking frim.

EA games; challenged by everything

No real support until $17.50.  Another nice RRR trade if you get short above $19.75.

MEE:

Looking for a breakout from a nice resting period following a nice rally on the daily chart. On the half hour chart there are a few key levels worth watching.  $30.50 (res), $27 (sup), $29.50 (short term sup) and also the two way support line (dashed blue).

MEE looking to rock or drop

My only concern that volume has been fairly light on the most recent rally.  For what it’s worth, the divergence at the top at $30.50 is positive, however MEE did not break to new highs with the market on Friday and might show weakness on an average day for the broader market as materials stocks are now beginning to show percentage performance parity with the S&P 500 (check relative strength chart).

CAG:

Check the 15min chart on CAG and you’ll see a nice breakout from the $19.8 level with a close above $20 on increasing dollar volume levels.  I would normally like the long setup here, but by close on Friday, CAG had more or less closed the gap from a year ago.  On top of that the daily chart is forming an ascending wedge.  Should the market begin to show any weakness at the start of next week, CAG could be a good short candidate.  This one could go either way, and as such is a nice stock to be watching.

OI:

A close above $35 could see some movement in OI to the $37.50 region.  Divergence is positive.  Check the next chart of CSX for the same type of setup.

CSX:

Another consolidation range breakout potential chart.  Volume not overly impressive lately.  Support at $42.50 and a close above the $45 region means there could be another few dollars here. No major overhead until $50.

Let's talk about csx

RTN:

RTN is one of those stocks that shows little emotion at support and resistance levels.  The wicking is minimal (like at DIS at the moment), and the levels hold or reject very well.  A nice volume breakout on RTN occured on Friday which caught my attention.  Yes, these consolidation breakout plays are the flavour of the week it seems, but RTN is the nicest for me.

Clinical

$48 if you can get it (or under $48.25) would be a spectacular entry for a RRR trade with technical price targets at $50 (which is also psych overhead) and $52.  I really like the probability on this setup.

KMB:

There are only so many charts of consolidation breakouts you can publish in one post!

Relative sector strength over the past  20 days:

Mighty financials

Economic calendar for next week from Briefing.com:

Sup next week

Should be some good trading next week, here’s something for the weekend:

ITUB	RTN	OI
DIS	MEE	ERTS
CAKE	KMB	CSX
MOS	CAG

Intra-day Action

Belter of a day for the bulls in terms of the numbers.  Very strong internals all day after good housing numbers and feelings about economy resulting from that.  Options expiration too for a bit more volatility about.  Of a list of 361 stocks on my watchlist, only 27 are in the red, with only 11 of those at a loss greater than 1%.  Perhaps the most interesting thing of the day is C above $4.50.  You have to be bullish with a close above this level with no real overhead until $6.50.

On the stats end of things from yesterday, we have more interesting numbers:

Stats from Thursday Aug. 21st

Heavy declines in advance decline volume, wondering if this signals a short term change in direction (up).  MON is the only stock to have had 4 days of decreasing downward volume.

On the technical side of things, most of the stocks I mentioned yesterday have performed well over the past 2 sessions.  It is nice when good economic news ties in well to key technical levels – this could have gone the other way quite easily.  It is not just technical analysis that a trader has to be good at, and the past few days have shown that.  In particular KB, CAKE, DOW, DIS, SPG and ITUB look excellent on the dailies.

I traded DAL at $6.80 yesterday and closed out this morning.  I cashed at $6.94 because I wasn’t at my computer when the market opened, and having heard oil was at year highs with the Bernanke announcement pending – it was a safe play.

DAL entry and exit

DAL is currently trading at $7.08.  I am now on a 4 trade winning streak with 6 of the last 9 being profitable.  There has been a real turnaround in my performance the past 2 weeks as I continue to learn about internals, relative strength, timing and luck.  I have also reduced my account drawdown by 450%  in the past month (which has stemmed from an error in a trade entry/limit order in DRI earlier in the year).

Right now I’m watching ITUB at $18.80 for a 1-2-3 at support.  DIS is testing a triple top on the daily at the moment on nice recent volume, any bull flag type pullback from here would be a seriously implied long.

Intra-day Action

Good participation yesterday on small gains

<Here is the latest update of my ever-changing market stats spreadsheet.  Yesterday was pretty interesting.  Good participation across the board, although slightly weaker in the services sector.  Utilities technically stormed it, but this is due to heavy volume in EXC.

Most interesting for me I think is the difference between the average percentage dollar gains versus the rise in the indices.  Tuesdays Av DV% ranged between 79-96% with the main markets up between 0.90-1.38% and advance decline ratio of 1.857.

Compare this to yesterday: Av DV% range 96-161%, ratio of 3.375 with the markets all up about 0.675%.  The hardcore of financials were similar DV to Tuesday, however this was significantly down from Monday.  The difference in my opinion is probably due to the huge volume and short covering in the morning rally after the gap down.  Realistically I would associate yesterdays stats with a day of advances greater than 1% in the broad market.

Distribution, Accumulation, Consolidation?

Here> are the stocks from the list I’m tracking that have either had 3 days of declining or advancing dollar volume.  Checking the charts, DOW DAL DIS and BAC all look pretty interesting here.  DOW with candles off the 25EMA, DAL on small volume pullback and short term bottom at prior resistance with 50EMA support.  DIS as mentioned on Monday, and BAC potentially forming an ascending triangle.

Charts catching my eye at the moment:

Check these out

Update 15:35BST (10:35US)

There are unreal amount of great charts on an intra-day and swing basis at the moment.  The ones I mentioned earlier are the tip of the iceberg.  WFC just popping out a descending wedge on excellent volume is one of about 50 I’ve seen today.  Basically every stock out there is tradable today, and I’m waiting for some pullbacks before getting primed.  DAL is one I’m watching at $6.80 today.  Gutted about KB too, up 6% on a stock I really should have noticed yesterday.  Easy come easy go yo’.

Intra-day Action

Swing trades
CAT	DIS	IP
GG	ITUB	PG

Above are a few setups for the next few days.  I continue to watch FSYS and PCU for potential trades, as FSYS started the bull flag nicely yesterday, but has opened strongly.  PCU is a slight weaker up 0.5% and is really in limbo just now – however it has just started to move up with a strong opening candle so far now at 1.77%.

I will exercise caution with the PCU trade given that overhead is at $26.50 – but the potential gap fill resistance is a point higher in the $27.50 range.

Sectors at the open

Industrials and materials showing nice strength this morning after a bad day yesterday.  Who would be trading utilities and healthcare in this market?  Market goes down, they don’t go down as much.  Market goes up, the go down a bit.

I’ve set alerts in a few stocks, so until those trigger I’ll work on the charts for the swing trade setups I mentioned earlier.

Potential swing setups:

I have removed IP from the list after some quality control measures, the setup was a breakdown of $19 for a short, or bounce for a long depending on market conditions – but I don’t feel there is enough justification on a technical level for this trade.

Caterpillar short at $45.50

I would like to short CAT at about $45.50 which has been an important support resistance level lately.  The chart above is the 30min.  Support at the moment in the $43.50 area.  Let’s see how this pans out after a triple top at $48.  The price target is $43, after this, there isn’t much supportive action until $40, however watch out for this being a bull flag setup on the daily.  Before shorting at $45.50, I would like to see a rise on declining volume, a weak industrial goods sector and a bearish day internally for the markets.

Disney each way

This setup is similar to CAT, however this hasn’t given up $25.  Target on a breakdown is $23.25 in this.  I would also consider a long here too, and with the 50EMA a slight below, there is good reason to consider it.  This is a two-way setup, and depending on how the market feels, this could go either way.  One to watch closely.  DIS is also pretty stable when it comes to S/R, as lately it hasn’t wicked dramatically at the $25 or $28 S/R levels.

More of the same on GG

Looking to short GG at around $35 in what is a fairly simple setup.  Offload 1/3 at $34 with a view to $32.

Have we missed the action at ITUB?

This opened a lot stronger than I thought it might today, meaning we could have missed the bus here.  Overhead EMAs might give us a slight pullback back to the $17 level which I would like to see (with 50EMA support), however $16.66 is the real important level here.  This has sold heavily and consistantly over the past week and could be due a bounce.  I would wait for some good buying pressure and a continuation signal on the 15min before entering here, as this could give it up and go back to $16.50 first.  $18 also potential overhead.

Bear flag at PG

Bear flag on PG daily with all EMA overhead that I look at.  No major decline in advance volume which is what I would really like to see.  Narrowing day ranges and topping candles would be a boost to the probability.

/swing trades.

Whoosh!

Unreal move in AXL this morning on a brilliant bull flag setup.  Textbook move really;

17:00BST update:

Internals have been strong all day, with stocks finally realising this about 1.5hrs ago.  This internal strength meant I didn’t open a short position in FSYS (which has now broken out), PCU (not at hit price yet anyway).  I am hesistant to short GG now at $35.85 due to this strength also.

It was only a month ago where I probably would have opened these positions, but I am exercising caution based on stricter broader market criteria for executions these days.

Check the 5min/15min of AXL too.  Perfect replication of the daily pattern on both of these timeframes also.  Good declining volume and a really strong breakout.  Great trading in stocks like this.

Watching SPY at 99.50.

Update 17:20BST

GG is outperforming GLD and /YG today.  Should the price of GG be around $35 when /YG is $945 and GLD is $92.50 then this will be a premium short.  It has sold off a slight at $34.90 here, however there is some inra-day support at $34.50, and with 15min 20EMA support I am not going to short it just now.

GG temptation

FSYS Breakout - new support at $32 flat

Close of market update featuring statistics:

Spent the close manually entering some data into the spreadsheet.  It’s pretty interesting so far, but it will take a while before I can start to understand how the numbers affect the stats.  Looking for where the money is going in and going out, strength of moves based on dollar volume changes and identifying when sectors are starting to get stronger.  It would be interesting to combine this stuff with short ratios or floats etc.  I will probably pick about 10 stocks to track with advanced analysis, but here’s a table that coincides with my sector hitlists:

These might mean something in a while

Dollar volume = volume * close price

C = number of stocks in sector included in analysis

R = ratio of DV/C

Up = ratio higher (more money in sector if Y, not = N)

>AR = if the days R is greater than average

DV Adv = amount of shares with a DV higher than the previous day

If this is combined with technical analysis, sector strength charts, market internals and the following type of table, then I should be able to understand the market better and get a better idea of what’s really happening behind the numbers.

Financials did not really compete today

I do not include techs and financials in the first table, as financials are so heavy they’ll always be on top.  This shows that the market was up an equivalent percentage today as yesterday, but with about 72% of the involvement in financials from yesterday.  This doesn’t really mean anything yet, and a larger sample pool of data is essential before I can begin to draw any worthwhile conclusions.  This table will also give me a numerical view of pullbacks (ie 3-6 consecutive days of a lower DV percentage approaching supportive technical level).

Intra-day Satisfaction

Despite not having any positions today, I’m feeling quite upbeat about my trading abilities.  Since I’ve returned to the game my knowledge and understanding of how the markets really work – and how different stocks interact with it – has really improved.  I absolutely love trading and everything about it.  But there is something I enjoy just as much as trading itself: statistics.  I love stats, and in particular I love making stats easy to interpret and easy on the eye.

One of my weakest points in trading is the specifics of each sector, and a lack of ticker exposure.  I have started watching the stocktwits stream, just for the tickers.  When I see one, I type it in and check out the chart and try to remember the name.  For the past few hours, while sitting out of the meltdown today, I’ve been working on a spreadsheet with data courtesy of Finviz.  The basic scan is pretty simple: +Small cap, >1m average share, > $20m average daily dollar volume, price over $5.  From this I’ve reduced it down to a list of 432 stocks (not including healthcare stocks).  There are no stats in this spreadsheet, it’s the info I’m keen on, ie;

• Find out where the money is going
• Finding relative strength in sectors and sub-sectors
• Finding liquidity
• Cross referencing my trades to find out which sectors I prefer or am consistent with
• A reference for my relative sector strength scans
• Ability to determine which stocks might be suitable for pairs trading
• Actually knowing some tickers for a change

Getting to know you

I have not included healthcare because basically I have no interest in that sector at all.  I have also discounted oil stocks (services, drillers and refiners) because from analysing my past trades in the sector, my win rate is 0%.  I have also realised that outside of AAPL and RIMM I have no interest in technology stocks.  At present I prefer to trade and watch materials, industrials and financials with a little bit of interest into services/utilities (thin).  The document uses Fridays data, so a more accurate version would have to be compiled using the data over a longer timeframe, to reduce the effects of earnings or news from that day.

Rotation

I’m not at all sure that this little widget on the page will tell me anything of value.  It’s just there for the moment to track where the money is going based on the dollar volume plus the amount of participants in my list.  Basically all it says just now is that people are heavy financials and tech, and nobody cares about utilities or consumer and industrial goods right now.

A bar chart of these values for the next week may be interesting to compare to the relative strength sector performance graph to see the where the cash is going.  I would have to negate financials and tech (heavy nasdaq) from this though.

In terms of strength for this particular Monday morning, the market is junk with the healthcare not dropping as much as the rest.  Materials continue to sell off hard.

I’m not really trading today as I’m only waiting for two setups at the moment:

FSYS bear flagin range

Really like this setup on the 10min 15min chart.  Support at $30 and resistance at $32.  Big drop down this morning and the stock is bear flagging on declining volume with short term overhead at $30.80.  Nice setup for a short today provided the market remains bearish internally.

Bearish action at PCU

Looks best on the 15min, but here’s the hourly.  Gapped down to a previous high this morning with current overhead at $26.50.  I’m looking for some bearish continuation.

Consumer awareness

For the past two nights I’ve been reading a book about Warren Buffet and George Soros, it’s a book that covers their investment habits and discipline and has been pretty interesting so far.  After reading about the lengths that Buffet goes to to analyse a company, I started thinking about the companies I’ve had exposure to in the past 24 hours – and whether firstly I enjoyed the experience as a consumer, and secondly if I would consider ‘investing’ in that company.  I’m not an investor by any means as I love to trade, and in the current climate I wouldn’t dream of taking any long termers.

The current climate of course is the recession, and I’m assuming much of my experiences with the consumer retail sector have been majorly affected by the “Global economic downturn”  as BBC news love to say about every 5 minutes.

Shopping/Retail:

I’m moving house in the next month, so spent a bit of time yesterday about town checking out deals on sofa’s, beds and electrical/white goods.  I went to a retail park which had two national furniture stores (DFS and Harvey’s) and two electrical goods stores (Comet and Currys).  DFS is the store most people in the UK would think of when shopping for a sofa.  The store was pretty average, and despite a large range there weren’t any that I would actually buy.  My brother also pointed out that there was a sofa that was in the same place as it was the last time he visited the store, about 18 months ago.  Poor stock choice and an inventory which they cannot shift?  No chance am I either buying a sofa or buying the stock (if it were available).  Also – why are people selling sofas wearing suits?  It’s a seat not a Seat.

Next door is a chain called Harveys, which I didn’t even know was there until I walked past it.  I’d also never even heard of the brand.  As soon as we went in, there were 3 or 4 people saying hello from various angles and distances.  I’m not keen on salesmen when I’m shopping, because I generally know what I want and I know exactly when I intend to spend money, and exactly when I intend to just look around.  Anyway instead of the usual “How are you?”, “Not working today?”, “Great day isn’t it?” (which I hate) – I got “Feel free to look around, if there’s anything you like, there is a stack of leaflets detailing the finishes and dimensions of all the products in the range and their prices – if there is anything else you need to know, come and talk to one of us”.  To me, this approach is so much better, and once one person said it, the rest of the floor staff seemed to be aware, and there were no repeats.

The range in this store was a bit better, they actually had regular nice sofas instead of outdated chunky uncomfortable leather and suede combinations.  The staff were better, the quality was comparable and the pricing was better.  The atmosphere in the store was a bit better too.  So why have I never heard of this store?

DFS advertise all the time on TV – total ‘lifestyle choice’ advertising which I despise.  Audi’s, BlackBerries and gym memberships are lifestyle choices – somewhere you stick your backside after at the end of the day is not.  Anyway, with so much advertising, people inevitably end up there spending money.  This means that they know their product doesn’t have to be the best, the cheapest or come with the best service.  That to me is stupid.  If you’re at the top, you should try and make the gulf between the competition as large as possible, meaning premium products at good prices, excellent service, good warranties/guarantees and knowledgeable sales employees who understand the business.  All the guys in Dfs were pretty young.  Market leader and a negative experience.

In Harveys, the guys were older and looked more comfortable in their roles.  The products were similar however there was more variation at Harveys.  It was also cheaper.  I would be happy to buy a sofa from there and I would buy stocks in that company.  It is likely that the staff there are on a higher commission rate than at dfs either way.  Market minnow and positive experience.  So Harvey’s if you’re reading; spend some cash on advertising and get the money through the door.

Next up was an electrical store called Comet.  I don’t know how many times we were asked if we needed help.. it was ridiculous.  The same staff kept walking passed, and at one point two came up and asked us one after the other if we needed help.  Commission and instructions from management to “get the sale” immediately sprung to mind.  If they were so eager to push the product, then they were obviously getting a cut.  There is then a stronger than usual conflict of interest between me and them.  They will not care what it is exactly that I need, they just want to flog me something.  I don’t like this approach, and I while I would use their website to buy the goods, I wouldn’t spend an an afternoon in there buying a hoover, vacuum, toaster, kettle or fridge – because there would just be too much hassle from staff.  Market standard (with Dixons and Currys) but negative experience.

Under the spotlight

Banking sector:

All too often I get a call or a letter from my bank offering me either; a loan, a credit card or an ‘advance’ account.  I never reply and I more or less put the phone down after the sales reel.  The other day I got a call from the local branch asking me to come in to see the manager.  I asked what it was about, and she said “just a chat”.  After arranging a time, I immediately assumed it would be a face-to-face sales pitch from the manager about a loan/card/account.  My intention from there was to get in, stop him short, tell him that if I want something I’ll ask them and then leave.

It was literally a chat.  Just a meet and greet and asked if there’s anything I want give him a call (got his direct number).  It was over in 5 minutes and he was a decent chap.  I left feeling pretty chuffed that the bank took the time out to do that without a sales pitch.  However, there is obviously analysis out there that says if somebody uses their service long enough and rejects all offers via phone and mail, that the chance is that they prefer a physical meeting.  So are they taking advantage, or are they genuinely interested and trying to improve customer relations after the meltdown in the financial sector?  Lloyds is a market leader, and while the meeting itself was positive, I remain cautious about ulterior motive.

Utilities sector:

Most days I drive the 12 mile stretch between Aboyne and Banchory in Scotlands north east.  There is one thing I have really started to notice lately, particularly from 3pm to 5pm.  It is probably a global phenomenon that you have also noticed; the slow moving utilities vehicle.  My town is quite rural and is 30 miles away from the nearest ‘City’, Aberdeen.  This city serves as far west as Braemar which is 60 miles away.  It seems that the drivers of these vans and cars drive start to drive as slow as possible at around 3pm.  This is clearly an attempt to increase the time it takes to return to the depot, which in turn reduces the time spent doing the job and also reduces any crap jobs they might have to do when they return to the depot (paper work, maintenance etc).  It is a lot easier to do something half-assed at 16:45 than it is to do something properly at 16:00.

The speed does vary with different companies.  I have noticed that BT (Telecoms) is by far the slowest.  We’re talking 40mph all the way.  Scottish and Southern Energy are the best, maintaining the legal road limit of 60mph at all times of the day in their equipment-laden 4×4s.  British gas is really slow too, at around 45-50mph.

Anyway what has this got to do with investing?  Efficiency.  The side of the business you see every day is how you judge a company.  If a BT engineer is going slow, then he’s lazy, not interested or actually has nothing to do (so is wasting the companies money by extending his work hours by slow driving).  The SSE engineers nip about, and I always see them here and there working away.  It shows that the staff are motivated and well trained, and the company are pushing to do as much as they can in a regular working day.  Good sign, no?

The council:

Yes yes, we have schools, parks, old folks homes and community centres and all of that, but the council have to be one of the most inefficient systems out there, particularly when it comes to road maintenance.  The past 5 days have been a prime example of a waste of tax payers paper.  The council have spent over 5 days working on re-tarring two bus stops on the main road in the town I live, while simultaneously re-tarring part of the entry to the petrol station, 25 metres away.  Cones have been up since early last week, and a light system has been operating since.  The result after 5 working days – they have taken off the first layer of tar.. that’s all.  Not only that, but 15 minutes away from the lights, they have a manual stop/go system with the most unhealthy looking human being I have ever layed my eyes upon.

Our council workers are lazier, fatter and slower than these in the pic from jstewart at trekearth.com

What are they doing?  It would take 5 semi-skilled operators less than 2 days to re-tar what is essentially an area of space equivalent to 3 parking spaces.  There were probably about 20 workers there, and with the exception of the plant operators and the soon-to-be-dead sign swivel-er, nobody was working.  I estimate there is at least another 5 full working days in this gig.  10 days with 20 workers, plus machinery, equipment and materials?  China built an international airport in 3 months.  The south deeside road was sub-contracted to a private company and they re-tarred the whole thing (20 miles) in 2 days…  Would you buy a stock in a road maintenance company that had the councils standards?  No chance.  The only reason they get away with it, is because they are the council.  Oh, and they strike all the time too.

Anyway rant/article over.

Intra-day Action

Morning Strength

Commodities really strong today particularly coals and metals.  POT has had a nice move too after pulling back to triple top resistance at $95.50 25 minutes into the day.  Ralph Lauren is still an absolute thorn in my side.  After being stopped out for half at yesterdays intra-day high, the stock gapped down and sold off heavily.  The stock has recovered a dollar on no volume and just keeps going off the 10EMA on the daily.  I will get stopped out for the remainder in 25 cents, this will be a huge drawdown if you were to consider that had I placed my stop a cent higher yesterday and not got stopped out, the drawdown from todays low is over 70%.  RL is the new RIG and stocks like this are just a total joke.

Intra-day Action

Strong morning, but first things first; a reminder of how glad I am that I quit the UK market about a year ago.

When I wake up each morning, I check out Google Finance on my BlackBerry lifestyle choice device and read the first few articles that cover the overnight futures action and any major news in the pre-market.  The headlines are generally from WSJ or Reuters, sources I respect and enjoy reading.  Anyway WSJ and Reuters both indicated a lower open after some overnight selling (which is actually what happened, then the market ripped).

Anyway the third article said “US Stock Futures update: Futures up overnight”.  I checked the chart and this was total balls.  The source? Interactive Investor!  My old UK broker which I used to rant about all the time.  Their news was garbage, their platform was garbage, the data feed was unreliable, their commissions were obscene, their execution was terrible and their order types were very restrictive.  This makes me wonder why a site like Google would even look twice at their news feed.  II are a total joke, and I maintain that anyone who trades the UK market go to a shrink and get their head checked out.  I mean literally every stock in the US has a 1 cent spread, even thin small caps.  About 80% of the FTSE100 highest volume stocks have 5-20p spreads… come on!

My main issue with the UK market, except for the manipulation and commission costs was the lack of good solid information, data feeds and software.  Any respectable US broker who opens up shop in London would make an absolute fortune and would undoubtedly monopolise the brokerage market for non-instituional investors.

Anyway back to trading:

Bit of a body blow today in AEIS, after selling off my position in thirds yesterday, the stock is up 3.5% and looking pretty decent on the daily chart.  The problem here was that my stop was way too tight (it was only 1.25% risk instead of my usual 2.25%).  There was also positive divergence, and had I held until close I would have seen a nice candlestick reversal pattern which continues a nice trend with a 3 day reversal pattern.  This trade was really simple, but my execution was shocking and this is something I need to continue to work on.  It’s showing nice strength today while the large cap techs pull up the Qs.

Again my primary trading issue is my lack of capital, with more I would trade on a portfolio rotation basis with 10% positions in stocks like AEIS which would also be hedged.  This is derived from the relative strength issues from this week so far, I was short high strength and long weak strength.  I should really have a few positions in different sectors, and I’ll look into this today.

Here’s the AEIS daily:

AEIS daily

Sector strength analysis for past 5 days:

Relative Strength in sectors

Intra-day sector strength

Not seeing much in the way of entries today after spending most of the time setting up the RS charts for future analysis.

Update 18:30 BST

Money is moving out of the financials and the sector is not making new highs with the market.  Industrials and techs are taking charge with both sectors breaking bull flags.  Watch AAPL out of $166 to see if this RS analyis works or not.