Hooray for Stock Market Blood!

There was a very nice 300 point drop on the DJIA today. Why am I pleased about it? I have been becoming somewhat savvy with trading over the past few weeks, that's why. I pull up the charts on Yahoo Finance, see where the support and resistance levels are, and make a hypothesis for as to what the price of the stock could go to. I have been reading lately, articles by people that are more knowledgeable than I, that there is going to be volatility in the market for quite some time. So, in anticipation of the market dropping off again, I put in some GTC (Good 'Til Canceled) stop limit orders and limit orders for my more volatile positions (DRYS, WFR, UPL), and just limit orders for positions that I wanted more shares of (BEAV). We will go into a bull market soon enough, which might be as soon as the next FOMC meeting (03/18/08).

I knew yesterday that the move on Crystallex was just hype, so I put in a stop limit order for it, which ended up selling some of my shares. I now have a limit order for it at the price that I bought it last time. I'm confident that it will get there, unless Hugo signs the permit before then.

A Ray of Hope

The never ending Crystallex (KRY) saga continues today. Crystallex is
a Canadian miner that has been preparing the Las Cristinas gold mine in Venezuela for an extensive period of time now. From what I understand, they have everything in place and have all of the permits they need but one. That last permit is in the hands of none other than Hugo Chavez himself. There is quite a bit of support for the development and production of the gold mine, because of the economic impact of the mine due to the creation of jobs and inflow of revenues to the country. I also read something about the military pushing out illegal miners from a territory nearby, which is apparently a good sign. I think if there is a significant outcry from the people to open it, and when Hugo sees a good opportunity to score some political brownie points with it, then he will sign it.

Taking Stock

I have been learning a few more things in regards to becoming a hybrid investor/trader, such as support, resistance, and breakouts. They are simply phenomenons that occur due to the psychology and irrationality of traders. I saw some videos about support and resistance on www.thestreet.com by Dan Fitzpatrick, and read about them in a book that I have been reading, "Way of the Turtle".

A Thought

It seems as though some things are so heavily dependent on random factors that they cannot be planned, no matter how hard you try. Just expect some random possibility becoming a reality.

Decision-Making Process

This is a highly specialized decision-making process that took many
years to develop:

Step 1: Close your eyes.

Step 2: Take a deep breath.

Step 3: Spin in place three times (more than that if you want to)

Step 4: Open your eyes.

Step 5: Wing it.

This process also works well in conjunction with the
eenie-meenie-mynie-moe method. Enjoy :-)

A Thought

Sometimes, the simplest things make the biggest difference.

Technically Speaking

I have found some technical indicators for stocks that have been
helping me considerably lately:

- Stochastics
- Relative Strength Index (RSI)
- Bollinger Bands
- Exponential Moving Average (use the 50 day average)

These indicators can be found on Yahoo! Finance's interactive charts.

These are playing a part in my quest to make a shift from being 100% investor to becoming 75% investor and 25% trader. It is just a simple matter of making an educated assessment of whether or not a stock is overbought/oversold, and having an idea as to what price to set my limit order(s) and my trailing stop limit orders at. It is an improvement on my buy/sell points.

I am still learning about analyzing share volume and the overall market. It is a matter of making it a point to persist in learning and improving as I go. In fact, my investigation of the OBV and CVI is still in progress.