Dear Subscribers,

First of all, I want to express my deep appreciation for your support of my efforts and this website. My contact with each of you has been, without exception, 100% positive.

I’m writing this note to explain the direction I intend to go as a trader and what that means to supporting this website in it’s current form. My trading life begain with a focus on SPX options, which is what I did for several years in parallel with single stock trading. Over the past couple of years I have traded primarily single stocks, and I believe there are certain benefits to taking that approach. However I’ve also come to realize that some aspects of trading so many different instruments does not play well to some aspects of my personality: that approach creates a lot of “noise” that can make it more difficult for me to stay focused on the underlying current of the market. Don’t misunderstand: I do just fine trading single stocks, as I did with trading SPX options, but it creates a different life experience for me in terms of my overall state during trading, and often, afterwards. I am a person with traits that lend themselves, I believe, to a narrower, deeper, more thoughtful approach to trading than what is offered by chasing every tradable pattern in virtually every stock.

So, my intent is to narrow my focus substantially, perhaps all the way down to trading a single instrument, in lieu of searching for tradable patterns in the various single stocks. As a result, I do not intend to continue my efforts to provide single stock setups as I have done in the past with this site. Rather, I intend to turn off the subscription service and use the site as my personal blog on my trading, my research in trading, and eventually as a platform to provide some kind of value added service to other traders. The form of that service is yet to be determined: it will depend on the direction I go as a trader and the extent to which I can provide something of value to other traders. My overall objective, however, is to put trading first and avoid creating website content that makes my trading more challenging, which has been the case with my approach of posting ideas and instant messaging my thoughts throughout the trading day.

So, for those of you that recently made a subscription payment, I will refund that to you, and if you are mid-way through a subscription period I will refund part or all of that payment. I will review the subscription period for each person and consider what is the fair thing to do. My overall objective is to make sure every single subscriber feels treated fairly, so I’m committed to making sure that is the case.

To each of you…thank you for your support and as we move forward, look for posts on how and what I’m trading!

Well…it irks me that I read the action wrong this morning and then failed to get long in a surprisingly strong market. The early weakness in XLF and GS, along with a rising dollar, made me think that we would rally a little then roll over…I was clearly wrong on that one. Moving on, here are three nice long ideas for Wednesday along with my watch lists.

A year ago on MLK day, the move down in the S&P that began on Sunday afternoon and continued through the close of trading that following Tuesday amounted to a 45-point range and a 45-point net drop in the S&P, which as a percentage of the opening price of just under 850 was a drop of about 5.3%. Could that be part of the reason we sold off on Friday? I don’t know, but I do beleve the psychology behind that move and others leading up to that (for example, the 103 point drop in the S&P on 9/29/2008) is probably still fresh enough in people’s minds that it could be having an impact over these holiday weekends.

With that in mind, along with the significant weakness in the market and market leaders on Friday, I’m looking more at the short side for Tuesday trading. There was weakness across the market leaders on Friday, registering many outside-down days on higher volume. Normally, that means “pay attention”. Further, the disproportionate weakness among BOTH the XLF and the SMH attracted my attention. Having said all that, we’re in earnings season now so we have to pay close attention to how the markets react to whatever the news is (so far, we’ve sold off on pretty solid results).

Here are a few ideas that I like for Tuesday. If the market is strong, I’ll lean long and will focus on the broad markets (SPY and/or SSO); if it’s weak, I’ll look for evidence that we’re going to finally shake out some who were late to buy into the rally. The three short ideas here are centered around the idea that if we start to get a meaningful move down, the stocks that are most vulnerable are those that have had significant moves up and thus are likely to have a lot of sellers. With that in mind, here are my three favorite short ideas:

Well guys, that early short trade in ZION paid well, and as I said I stood aside after that. We have earnings from INTC Thursday after the close, and Friday morning by JPM, as well as a full schedule of news those days. Friday is options exipiration as well.

Right now my plan is to work the remainder of the week on refining some aspects of my trading approach as we’ve had 3 days of decent trading and setup ideas. I plan to be back posting by Sunday evening for Monday trading.

Review of today’s trades and ideas for tomorrow.

Lists for Tuesday, both long and short ideas, and a video covering my favorite 3 longs and 2 favorite shorts (first part of video) and then a very quick review of the remaining symbols after that.

Here are my watch lists for Monday, a selection of 9 long ideas for trading and a video reviewing how I plan to trade them. See you in the morning!

Here’s a review of the trade I missed in NANO on Friday and a trade I took in HTZ but exited early…maybe I can shed some light on what I was thinking at the time. Friday’s Instant Message transcript also:

Well it was a rather solid day of profits again today despite being very right on USG but getting shaken out before the move. There were also some real nice moves in other stocks on the watch list for today, including that nice short in JRCC that I called early in the session. I definitely picked the dog of the financials (C) when you compare it’s move to some of the other financials, but, I still think it’s got some room to run if the market holds up and I’ve already booked nice gains in it. In retrospect I would have stayed in MS longer (much like FXI and USO) and I would have loaded the truck with ZION, but hey…that’s all hindsight. I’m happy to know that a lot of subscribers are making money on the intraday calls over the Instant Message system…awesome!

It will be interesting to see how the NFP report looks and what impact that has…I’ll be on my toes waiting just like everyone else. Here are two more long ideas for Friday, complete watch lists, and the transcript from today’s Instant Messaging. See you in the morning!

Note: I added BYD to the watch list after this post.

Well…it seems to me that a lot of what happens over the next two trading days will depend on Thursday’s Jobless Claims report and the Friday’s Employment Situation report. Rather than posting annotated charts, here are my long and short watch lists and a few notes on what I’m thinking. I will do my best to communicate over the IM system as things unfold.

Longs:

If the market is firm, I particularly like the short term consolidation patterns in ATHX and RDN, and to a lesser degree CCJ. I do like CCJ in the sense that it’s pulled back to a logical support area within an established uptrend, and other companies in the uranium space see to be doing well (USU, USEG). I’ll be watchig these three for consolidation and breakout moves.

Shorts:

Rather than typical break down short candidates, I have a handful of stocks/ETFs that seem to be way over extended to the up side. Thus, if the market is soft I will be looking to help flush out late longs in the energy and steel sectors, particularly JRCC in coal and STLD in steel. More generally, I think that in a soft market (particularly if that softenss is due to a firm dollar) I will look to KOL and OIH for a short opportunity. These are counter trend trades so to the extent we trade them we have to be rigid in our risk management.

See you in the morning!