OT: Asking a Favor and Making a Plea

Would anyone who frequents this forum and/or who has ever recommended a post by Quillnpenn or me please start posting here again?

We all miss the old forum format. I, for one, miss being able to pull a person’s profile, so that replies to questions could be customized. I also miss the ability to send a reply to their email address rather than post it publicly.

But to their credit, the Motley Fool has made several HUGE improvements that make discussing stocks (and ETFs and even mutual funds) so much easier.

(1) We can now edit our own posts. (2) We can now post price charts.

What motivates my plea for increased traffic in this forum is that all of us have a common problem. The current market and the current economy are a mess, making it very difficult to want to put much new money to work, at least not until things shake out or settle down, and God only knows when that might be.

Meanwhile, sitting on our hands isn’t fun, nor is it very productive. As my all-time favorite quote says, “He that cannot abide a bad market deserves not a good one.” (17th cent, unattributed) So, if for no other reason than to keep our hands in the game, we need to do best we can, with what we’ve got, and that means trying to find the opportunities that might exist and dipping a toe or two against the time --and it will come-- when larger money can be put to work.

Much thanks in advance, and hoping to hear from you soon,

Arindam

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Don’t know if this is answering your request but I’ll give you what I’m thinking.

Yes, this stock market is infuriating 'cause it doesn’t seem too know what it wants to do. I was anticipating a bigger drop and a weaker economy by now. Makes me think things aren’t as bad as some people have been / are saying. But, now they’re saying 2023 is gonna be “the bad year”.

On the other hand the market has only been down more two years in a row twice in modern times. 1929-1932 and 2000-2022. Any credible reason to think this correction is anywhere near those conditions? ADIVSO: This Federal budget tete a tete coming in June might had something to all this but The End of America (Dramatic music) I do not think it will be.

I am and have been in more or less cash since last year this time. MMF, bank accounts, with a short term bond fund, some 20+ year old I-Bonds,

I will return to the stock market when it tells me where it’s going

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“I will return to the stock market when it tells me where it’s going.”

Much thanks for jumping in.

Yes, standing standing aside is prudent when the evidence of tape says the market is directionless/conflicted/confused. But it also has to be said that there is no such as the market, but a plethora of them, not all of which act in synch.

The usual quip, maybe offered by Ralph Acompora on the old Wall Street Week program, is that “It’s a market of stocks, not a stock market.” But to that market has to be added the bond market(s), the currency market(s), the commodities market(s), the real estate market(s), never mind the markets for fine art, etc. Some of those markets are tough for a retail investor to access, much less participate in responsibly. But they do exist, and not all of them are moving in synch with the US equities market, nor are all international markets, easily accessed through country funds, be they open-end, closed-end, or exchanged traded.

Also, I’m ever the optimist and take hope from the old saying, “There’s always a bull market somewhere.” Also, though most investors find it too counter-intuitive to attempt, selling short is always something that could be done, or --in truly directionless markets-- one could make use of the various bracketing options strategies, though I’ll freely confess I don’t remember the diff between a ‘straddle’ and a ‘strangle’. But I do have Level Two options permissions at a couple of brokers, and I wouldn’t mind brushing up on their mechanics so I could run a few small experiments.

And speaking of options strategies, there are a dozen or so ETFs --some of which I’m long-- that are options-based, and they pay very fat divs, sometimes more than enough to overcome their price fluctuations.

In sum, if one steps back from the daily hysteria of breathless news about what “the market” is doing and actually looks around to see what else there is, it’s truly humbling to see how much of the financial world is being pushed aside or ignored.

E.g., pull a 3-month chart for cocoa, or copper, or the gold miner juniors, or Turkey, Greece or the Philippines and then benchmark them against the US broad market. There was ton of money to be made in those markets , but probably wasn’t, because we focused on our home market and weren’t looking anywhere else.

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Well, you came pretty close to overwhelming me, hah hah. Forgive my narrow-mindedness. As you’ve discerned I am, in general, a SPY/QQQ type. I’m either in or I’m out. But you are correct, there are other places to make your play than “the market” as colloquially referred to.

I am not as sure as others regarding “there’s always a bull market somewhere.” And if there is, as I find it hard enough to keep up with the plain vanilla of “The regular stock/bond market” , I would not be the type to be risking investing in other markets. Foreign markets? So, politics in the USA isn’t enough for you, eh? You wanna follow local tribes elsewhere? I had some foreign funds way back in the 90’s. I owed all sorts of wierd-assed taxes on them. They didn’t perform in some outlandishly big way and were in general a bit vexatious. Besides, those big American corps make plenty off of foreign lands. In the end, when markets are down, they’re all down. The timing might not be precise but I just never saw how one does any better hunting in foreign markets unless you really have an eye, and ear, and a nose for the next U.K, German, Chinese etc BIG HIT! And really, who’s that good?

Emerging markets? Unimpressed, unless you like using your money to pan for gold. How much has anyone ever made panning for gold? Just never seemed worth the effort/risk.

Commodities? Now that’s worth looking into. I tried that back in the mid 1980’s. Didn’t understand it and as I was making plenty good bread in stocks why complicate things? Now, I am old and do not see any reason to learn new tricks of this nature. Therein would also be a reason to look overseas / emerging markets. If they have the stuff then that’s where you need to be oriented

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FC,

You make the same, very shrewd point that others have, namely, that so many US companies really are global in the scope of their operations that international investing doesn’t offer the diversification it once did. Also, there is the not insignificant matter that foreign accounting standards are weaker than those in the US, plus the hassles that come at tax time from owning overseas investments.

The commodities markets, OTOH, are something I’ve always tracked and sometimes traded in. Right now, gold is moving, though not silver for reasons I don’t understand, and the softs, especially the grains, are nose diving for reasons I truly find bewildering. Have people stopped eating?

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Funny, another reason I’m still an amateur. I always assumed foreign accounting standards were more stringent than ours. Harkening back to my earlier post, I’m not sure today that I don’t still owe some countries $2 in taxes. To quote Stan Lee: “Nuff said.”

Your observations on gold/silver and grains.? I hear ya.

Here’s another one you might be familiar with since you obviously know more about this than I do. I wish I could give a citation or a url or author’s name but I cannot. Not too many years ago (I want to say 5-ish or a little more) I was reading an article (yes, on the internet). The author made a pretty good case for gold not performing nearly as well in any future inflationary period as it did in th3 1970/80’s. His reasoning (and charts) was that the bigtime start of the inflation of that era coincided with USA’s
going off the gold standard. That is a situation which cannot be duplicated or revisited. I am not enough of a gold maven to find holes in his thesis.

I have off/on tried to follow commodities over the years. What I always come away with is unless you are the person who starts the war, or controls the weather that causes wheat/corn/rice/coffee to stop growing there’s nothing to really see there.

If investing in stocks is 1/3 playing a grand, educated hunch, playing in commodities is almost a total hunch and if there’s a way to truly get educated in it, I’ve never found it

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I assume that you understand how to read charts. Is there a book or class that you would recommend to somebody who wanted to understand the Mechanics of Technical’s?

Andy

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Andy,

There’s a dozen ways to learn how to chart stocks, but only one reason to do so: ‘Risk Management’. Would you drive around town after dark with your headlights off?

Technical Analysis (TA) has zero predictive ability, just as Fundamental Analysis (FA) has zero predictive ability. Both are merely tools that describe what has happened. FA uses numbers and words to create the company-specific accounting fictions known as 10Qs/10Ks. TA uses lines (based on price and volume numbers) to create pictures of how a stock traded in an auction market for any given day, week, month, or year.

Depending on whether you’re a left-brained person or right-brained person, you’ll prefer to use one or the other to make investing decisions. But the killer combo, as John Murphy has pointed out, is this:

FA + TA = RA (aka, Rational Analysis)

If you want a book list or web-based resources from which or from where charting could be learned, I could provide that. But let’s cut to the chase and get some skin in the game. At random, pick five stocks that you currently own and give me the date you bought each of them. I’ll use those facts to build charts, and then we can go back and forth on what coulda/shoulda been done and what you might want to do with those stocks going forward.

What you should get from this exercise is a good idea on whether TA and charting might be a tool you want to acquire, or whether this TA/charting stuff is just tea leaves and nonsense.

Arindam

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Excellent Arindam, I am all about learning. If Technicals are not for me I have no problem with that after I have investigated it but if they can better help me understand the stocks I own the better I will feel about them. I will get the five stocks and get back to you. Thanks Arindam.

Andy

FC,

Eisenhower once said --or maybe it was Henry Ford-- “If a man thinks he can do something, or if he thinks he can’t, He’s probably right”.

If investing in commodity futures (or their ETF variants), such as wheat, 'beans, etc. or the stocks of producers of commodities (ADM, Cargill, etc.) isn’t something you feel confident about, then --for sure-- the prudent thing is to back away and to stick with things where your comfort level is high. Me, OTOH, doesn’t mind the risk of failure, because that’s where I find out where my limits are.

Neither approach is the only right one, and both are driven by one’s innate preferences, the diversity of which means we humans can survive as a species, because some of us aren’t killing ourselves taking risks that didn’t pay off, while others are enabling group survival by taking risks that did.

Fictionalized examples of this play out in James Michener’s wonderful books Hawaii, or Mexico.

A

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Ok Arindam I have my stocks and this should be interesting. Thank you for your time. I know it’s better to have a baseline of understanding before teaching someone, and I am completely clueless, so if you would rather I get a basis of knowledge I will understand. But here are my 6 stocks. Tesla 1/6/23, DDOG 6/2/22, Crwd 12/15/22, Bill 3/23/22, Upst 9/3/21, Afrm 2/8/22.

Thanks again.

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…so if you would rather I get a basis of knowledge."

B&H,

No. No prep is necessary. If I can’t make charting so drop-dead obvious that you don’t say, “Well, duh. This is easy,” then both of us are wasting our time. However, that said, it’s going to take me some time to structure this chautauqua properly, because what I need to do --and the challenge I’m imposing on myself-- is to show that BOTH fundamentals and technicals matter. But, also, I need to do so in a manner that both of our eyes don’t glaze over.

That’s going to take some thinking and a few drafts. But it’s a good challenge. Meanwhile, put stocks and markets out of your mind and spend sometime in the kitchen with family or friends, or just get outside for a good long walk or bike ride. This market stuff ain’t rocket science, and it doesn’t deserve much fretting.

Arindam

B&H,

A quick follow up (after having done quick charts for your stocks).

You’re a better trader than you think you are. You just need to focus a bit more on risk management, so you don’t let the market take back your profits. But as I said, let me think about this for a while before I post charts and commentary.

Arindam

I agree my risk management really is bad.

Would Excel sheets with the fundamentals help you?

Andy

re: Charts

I looked at B&H’s stock selections and would have asked what did you do after the purchases. Did you do what all HODlers (hang on for dear life) do?

Let’s look at various ways of looking at a chart to make an informed decision.

You’ll Never Look at Candlesticks the Same Way Again - YouTube The question would be when do I BUY out of the gate and when do I SELL at the finish line?

Let’s review a simplistic way as a thought. I have been trading using the OHLC bars for over 60 years. The following has two (2) very simple rules. It tells you exactly when to buy OUT OF THE GATE and when to sell at the finish line. Out of the gate means wait-one-day after the price label is posted. In other words, heading north. If not, keep waiting. Same for when to sell. Finish (sell), and wait - one-day after the price label is posted. Practice practice practice reading the chart telling you what to do. I review over 100 charts every night

Re-printing the rules of Swing Trading

Re-printing how to Swing Trade via TETTER TOTTER. Start learning how to trade the Pairs for the Recession is almost upon us.
I have been trading SPXL / SPXS and QQQ / PSQ since 2006 - 2014 and 2014 - 2022. 2023 - so long as there is a Standard and Poors market for trading. Have earned over 25mm so far. It only takes 10 to 15 minutes a day at 10 am and 3:30 pm for the WAIT - BUY - SELL decision.

GMCR was the very best stock to have ever owned. GMCR was later bought out by a German company (JAB Holding Company). Would have retired a long time ago on just this one stock. GMCR Split History First trade was with 50K down per Simon Sez rules.

ACP | StockCharts.com Simon Sez is to sell on 1/19/23. Assuming you bought 1000 shares since 12/23/22 for a very nice profit.
Now, what do you do today or tomorrow? We would WAIT - BUY - SELL.

Assuming I traded AFRM since day one, I would have had 18 out of 18 successful trades with zero losses at 1000 shares at each buy.

Another way of Swing Trading AFRM (at the below) is to buy and sell per the moving averages or buy per the Green dots and sell per the red dots (SARs). and for confirmation is the bottom panel at the crossovers (green crossing over red heading north.
Simon II shows a smiley face on 12/05/22. We would SELL per the Simson Sez III rules. And then sell on 12/23/22 we would then BUY per the rules. Now we must only have two (2) ARCS on one view. Now slide the chart to the left and notice what happens. Yep, a smiley face appears and we now have a SELL signal. Since AFRM has been sold you don’t care what happens. As a guess AFRM will rise higher based on the bottom panel’s flow.

Let’s look at using Candle stix. But,

Almost the same except using Heikin-Ashi bars instead of Candle stix. Simon IV is telling you to BUY the first bar after the last RED bar. And SELL after the last GREEN. All the while, we must have confirmation to be in Buying mode. There are a lot of false signal bars.

Some Swing Traders like to trade the above.

Today, I manage my wife’s Ellevest.com matrix portfolio and all of the SPDRs including the XRT portfolio since 2007 and since 2006 my successful Tetter Totter Principle account. Never lost a dyme other than hitting a few speed bumps and a few head fakes.

Manage the following with risk and money management skills.

CELH since 2007
TSM since 2000 Sent all our chips to them for manufacturing and testing services.
ASML since 2000
MCHP since they laid me off back in 2007
COST since 2000 since they wouldn’t hire me as a greeter at the door.
CAR since 2000 since they wouldn’t hire me as a car transporter.
HD since 2006
DAL since 2011 - An excellent Airline
ALK since 2007 - An excellent Airline

How to Become a Millionaire / How to Become Rich - YouTube. Duplicated his portfolio.

B&H,

The above is one way of Swing Trading that I have done for the past 48 years and over 60 years as an Investor… Arindam will come out with another idea soon.


2.5 % Theory

An easy guide From Amazon with a 3 % goal to earn 1 million dollars.

“The Millionaire Blueprint: How To Turn $100 Into $1,000,000 Within One Year”

eg . . 2% Spreadsheet. Follow along until you understand the flow.
re: 2% theory result spreadsheet1a-200515-084…

You can use Robinhood.com or WeBull.com for easy access to your portfolio.

0 - Invest $1,000.00 making $20.00 profit.

0 - $1,000 plus the $20.00 equals $1,020.00

1 - Invest $1,020.00 making $1,040.40 @ 2%

2 - Invest $1,040.40 making $1,061.21 @ 2%

3 - Invest $1,061.21 making $1,082.40 @ 2%
.
.
.
199 - Invest $51,455.78 making $1,029.12 @ 2%

Now, you can stop at any time at say Day 199 and earn $1,029.12 at every trade.

When you make more than 2% of the balance, withdraw it and use that money to fund your life or perhaps buy a new car every year.

There will be days you can earn 2 or more successful trades on the same stock.


2.5 % Profit Matrix Spreadsheet example

Trade 	Profits	            beginning	                  Balance	      Petty cash
0	 $-   	                           $-   	                          $1,000.00
1	 $25.00 	                   $25.00       	                  $1,025.00 	
2	 $25.63 	                   $50.63 	                  $1,050.63 
3	 $26.27 	                   $76.89 	                  $1,076.89 
.
.

30	 $51.16 	                           $1,097.57 	  $2,097.57 
	
60	 $107.31 	                  $3,399.79 	 $4,399.79 

90	 $225.09      	                  $8,228.86     $9,228.86 

120	 $472.15 	                   $18,358.15 	 $19,358.15 

151	 $1,015.13 	                   $40,620.15 	 $41,620.15 

180	 $2,077.36 	                   $84,171.79 	 $85,171.79 
.
. 

Starting balance can be changed to ANY amount you wish, eg…2,000.00, 3,000.00, etc.

If I invested $ 1,000.00 @ 2.5% earning 25.00
If I invested $ 1,025.00 @ 2.5% earning 25.63

After purchasing the stock I like to put in a SELL LIMITED order rounded up to the nearest nickel and the difference be placed in the petty cash draw.

Line 180 You can freeze at a constant balance and earn $2,077.36 at every trade or every day.

2 Likes

You just need to use SPXS and SQQQ for when you would be otherwise out.

Regarding the OP, the new format just makes it much harder to see the new activity as opposed to the old “Favorite Boards” landing page that I used to use. So I find that I stop by much less frequently as it just seems to take more effort to find recent posts.

Wow, am I lazy or what?

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That is a lot of information Quill. So if I was to use your Simon sez What exactly would you use on the charts to set it up. You showed me many different ways(it was strange but the Macd at the bottom of the chart did not show up in Chrome but did in Firefox) and I understand that it is up to me to pick the best way for me, but if you could tell me how you would set it up I would appreciate it.

Also I assume you use barcharts for all your charting? Since I am really clueless on this would you say that would be the best way for me to start out?

One last question, so you do not hold any positions long? You are either doing Simon Sez or teeter totter?

Yes I did and it worked beautiful in a bull market but it crushed me in a bear market. That is why I am trying to understand how to manage my risk better. During the Bull everyone was saying that stocks were to high, and they were, but it didn’t matter because of so many reasons. But now the Feds have come in and doused the party. So I am looking for some tools to help me along. Thanks for the information.

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Andy,

Quill’s ‘Simon Method’ doesn’t depend on using a specific set of indicators, nor a specific set of parameters with those indicators. MACD? CCI? TSI? StochRSI? Wm%? All good. Ditto which MA types, their look-backs, or chart overlays like SAR. It just doesn’t matter.

What does matter is that whatever bar types, lookback periods, and indicators you settle on do pick out the turning that you’d like them to pick out in the time frames you intend to track and trade. That means you gotta chart, chart, chart hundreds of stocks until drawing charts becomes so second nature that, given any “hot stock” tip, you can throw together a chart in 30 seconds and tell in another 5 whether the tip is timely or not. This is no different than what a good fundamental analyst can do with his materials. Throw him (or her) a 10Q, and if they can’t tell you in five minutes whether the company is sound or what the warning flags might be, don’t hire 'em. If you think that’s a ridiculously high barrier, that’s Buffet’s test.

Quill uses StockCharts a lot, because he has a paid subscription that allows him to run customized scanning scripts. I’ve stopped charting there, because I prefer BarChart, because a free subscription allows me to store chart templates and keep five watch-lists, plus the site is so feature rich one could never exhaust what could be done. But charts can be built at any broker, and the differences between them are as trivial as using a pencil vs a pen vs a felt marker vs pastels vs charcoal to make a quick sketch. What matters isn’t the medium, but your sense of proportion, perspective, and contrast.

Yeah, bull markets vs bear markets can be a problem for would-be, “long-term” investors. But the solution to avoiding large losses is simple: stand aside or sell short. (Small losses are just the cost of doing business.)

Lastly, if this Technical Analysis stuff is making you feel overwhelmed, then here’s a video to cheer you up. Ignore her charming accent and gorgeous figure. Pay attention to what she says and the scanning tools she suggests. I’ve tried them. They work.

Arindam

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Thank you Arindam, I feel I am a good fundamental investor, I understand the financials very well and I track all my companies results every quarter in Excel. All learned by reading books and asking questions for the last 13 years. I am a weak option trader, but I only use calls and puts.

Excellent Arindam, that is what I need. A free option to learn with. That is really helpful. I will have to check my broker out also.

Right, My problem looking back is when exactly should I have stood by? That is hard to know. Just look at 2020, who would have thought the market would have come back so strong. It was just crazy. I don’t mind losing that is part of the game but it would be nice. But I think now buy and hold forever, while working, can be really devastating. It would be nice to step outside and let it slide.

LOL thanks, you guys are really being helpful.

Andy

Andy,

If you’re strong on fundamentals and would be willing to buy puts as needed and to write covered calls, your risk management problems have solved themselves.

Arindam

1 Like