Panic of 1873

I have always been interested in history. Here is a comparison of our time to that of the 1873 panic. The Real Great Depression, here is the wikipedia article Panic of 1873.

A side note, the agriculture stocks continue to be beaten to a pulp. MON is at or close to a 52-week closing low. POT, CF, MOS all look like death. ADM is the only one not close to its 52 week low, and I believe that will not remain true for long. It is trading inside of a rising wedge, but it is also above most of its moving averages, which is bullish.

All the rail stocks I mentioned are very close to their 52 week lows, one of the last sectors to have succumbed to this bear market.

The indexes seem to be still range bound.

If you want to find bullish stocks, check out bespoke's list here.

EBS looks like an interesting short candidate, since it has started to move up parabolicly. But since it is a biopharm company, holding it overnight can be lethal. Also, just because it has started to move up parabolic does not mean it will stop, so picking a top can always be dangerous.

LOPE looks like a great IPO, closed today at a 52 week closing high.

Have a good holiday!

ADM

It is becoming harder and harder for it to make new highs. Looks like a rounded top to me.

Stop at 28.

Update: added line to show decreasing in volume on recent rise up.

SRS

Was a crazy move today.

Holdings

Simon Property Group Inc.	7.76%
Vornado Realty Trust	4.69%
Public Storage	4.56%
Equity Residential	4.31%
Boston Properties Inc.	3.99%
ProLogis	3.87%
HCP Inc.	3.59%
Plum Creek Timber Co. Inc. REIT	3.08%
Kimco Realty Corp.	2.90%
Avalonbay Communities Inc.	2.71%

Stocks Close to their Lows

The lows are all closing lows.

BIDU: CLOSE=104.54, 52WEEKLOW=104.54
BNI: CLOSE=75.89, 52WEEKLOW=71.55
BPT: CLOSE=68.04, 52WEEKLOW=65.01
CEA: CLOSE=8.56, 52WEEKLOW=8.56
CLB: CLOSE=54.0, 52WEEKLOW=51.79
CN: CLOSE=38.23, 52WEEKLOW=37.8
CNI: CLOSE=34.99, 52WEEKLOW=32.01
DBA: CLOSE=23.49, 52WEEKLOW=21.97
EEV: CLOSE=55.86, 52WEEKLOW=55.86
ERF: CLOSE=19.99, 52WEEKLOW=18.35
EROC: CLOSE=6.38, 52WEEKLOW=6.16
FXP: CLOSE=32.73, 52WEEKLOW=32.73
LUV: CLOSE=7.88, 52WEEKLOW=7.76
PBT: CLOSE=14.18, 52WEEKLOW=13.13
PDS: CLOSE=6.72, 52WEEKLOW=6.29
PGH: CLOSE=7.82, 52WEEKLOW=7.17
RIMM: CLOSE=38.43, 52WEEKLOW=37.2
UNG: CLOSE=23.68, 52WEEKLOW=23.27
UNP: CLOSE=49.05, 52WEEKLOW=46.9

Overbought

McClellan

Expect some pullback or consolidation.

The Best Performing Ultra Fund

Has to be DTO


No jerky movements, just straight up.

Ags still weak

A while ago I noted that ag stocks have been very weak.

POT made a new 52 weak low, ADM was down 4% today and CF is hanging off of its lows and looks like it wants to continue downward. I am surprised how well MON has held up. I really expect that the stock will be another -50% until it approaches any kind of bottom.

GOOG

Today offered a great entry point in the morning. If you have a position in GOOG a stop should be put below today's low, about 265, or 270 if you want to be more conservative.

Managing Loss and Position Size

Here is a simple way to manage your trades and your losses.

This is a VERY simple but helpful calculation that will make sure you take a limited loss and position yourself accordingly.

Desired Wiggle Room * Position Size = Max Loss

I use 'Desired Wiggle Room', as the amount which the stock can go against you before you invalidate a trade and call it quits.

Therefore,
Position Size = Max Loss / Desire Wiggle Room

As long as you know any two of these variables the other one should be easy to calculate. My preference would be to use this formula to determine my position size. Say I wanted to short GS as a day trade. I am only comfortable losing $300 on a trade before I give up on it. GS is trading at 68.9 and I think it has run out of steam. It could break above 69, but should quickly fall back down. So I want to allow this trade to go has high as 69.2 before I admit defeat. With this in mind I can position myself accordingly:

Position Size = 300 / .3 = 1000

So I can take 1000 shares short at 68.9 and have a stop at 69.2. This will limit my loss to $300 (assuming stop is hit exactly at 69.2 which it probably wouldn't).

If I feel like the position size is too big, or my 'wiggle' room is not sufficient, I can always change these params. Say I wanted to allow GS to run to 92.4 before giving up.

Position Size = 300 / .5 = 600

Goog Fibs

Market has been acting strong. Take a look at GOOG for a potential long. Here are the fibs from the IPO to the peak.



A closer look.


Usually a test of a trendline breaks on the 4th or 5th time. GOOG is approaching 20 DMA for the 5th time in recent weeks. I like it long but with a weak hand.