Sunday, September 25, 2011

Laird Hamilton's Knowledge Of Big Wave Riding Transcends Over To Trading Market LEADERS

I posted these videos on the Twitter stream last September when I saw them. What Laird says just resonates with me as a trader. You have to always be ready for the big opportunity. That means you must always be in a strong position in order to take advantage of these opportunities when they present themselves. A moment's notice is all you will get, because you have to be in the moment in order to catch the notice. In our case that is the price action, volume, and pattern on our charts. When the wave of money starts pushing hard one way we want to take full advantage of that directional flow. Another thing we must do is prepare ourselves to be in the right spot in order to catch the really big move. That means sticking with the market LEADERS. The force that powers their spectacular moves is EPS (earnings per share.) If EPS is leaping & bounding Quarter over Quarter and Year over Year coupled with a well constructed chart pattern, and the market is right; well you've got yourself the perfect situation for a BIG MOVE. You want to ride that LEADER until the energy peaks out of it,then step back, and see if it will then set up another nice move in which to surf into some big profits yet again. It's known as William J. O'neil's CANSLIM system, and I know many of traders who will attest to it's effectiveness (yours truly included.) If you have never read How To Make Money In Stocks by William J. O'neil then you are a "neophyte out there playing with seasoned professionals and you ARE going to get hurt." You must always be ready for the market. However, in order to be ready you must be prepared with the BEST knowledge you can get. And the only way I know to do that is follow the teachings of BIG STOCK surfer William J. O'neil & his wonderful publication ( www.investors.com ) Investor's Business Daily. See how I tied that all together!?






Laird is talking about catching a 1st stage base in a market LEADER, right?!? When Charlie asks him "When you think of a great wave,what do you think; opportunity?" Sub in 'trade setup on a market LEADER' for wave, and you'll understand how my mind is working while listening to this. ALWAYS BE PREPARED & ALWAYS BE READY for the OPPORTUNITY!




I own the 4th Edition orange cover book, but the newest release the green cover is one that someone new to this should buy. It just has newer charts from March 2009 market.

Sunday, September 18, 2011

Finding Buy Points and Pyramiding

I thought I would share an email response that I sent to a fellow trader yesterday that was asking me about buy points on CSH, JOSB, SGI, WYNN, CHKP, and CPHD. In going over those buy points I elaborated some as I tend to do. So I give you a little TCM,LLC commentary drawing heavily on the teachings of William J. O'neil & Jesse Livermore.


CSH 60.37 was the buy point. Close of 60.54 can be a level to watch as it was the close above the buy point. 61.69 will be the next level to watch. However, anytime you identify the PROPER buy point on a pattern you should calculate out 5% from it in this way. 60.37 x 1.02 = 61.57 this is an add on spot. 60.37 x 1.04 = 62.78 add on spot. And then 60.37 x 1.05 = 63.38 this is where it's 5% extended from the buy point and you should be finished with your buying operations. This is O'neil's pyramiding method ie: Winners average up! So any buy point you ever id, first things first, go calculate 2%, 4%, and 5% past the buy point. The way it works is you determine what you will invest in the name you've identified a proper pattern in. Go 50% of capital at the buy point. Then if it's acting right you will then add the other 30% of capital at the 2% extended spot. If it then continues to act right you will then add the remaining 20% of capital at the 4% extended spot. When it's 5% extended you are then done buying and you then sit on your hands watching it closely for signs of stalling, distribution, abnormal behavior, etc. All the time making sure it continues to act right. The bulk of proper bases will break out and run 20% before building a new base. This is why you lock in gains at 20%. In bear markets that should be adjusted lower to perhaps 10-15%. Anyway, this is all in O'neil's book (Chapter 11 of the 4th edition page 257-259.) And my buy points are a bit higher because you always add +.10 to the high where you identify the buy point, so as to make sure it can clear that high with conviction.

JOSB - double bottom with handle 52.96 handle buy point & 54.47 buy point.

SGI - 15.83 - 23.51 is a Fibonacci box as I call it because 15.83 is the 23.6% level from high to low from 2006 high to 2009 low. 23.51 is the 38.2% level. I have 16.99 as an early buy point and 17.81 as the buy point. I also note that it needs more accumulation on the weekly. I'm looking at all weekly charts to find the buy points. The patterns stand out clearer on weekly charts, and you want to be looking at volume with a 10 week moving average making sure there is accumulation and not distribution up the right side of the base.

WYNN - 157.79 handle buy point (153.50 close from 8/30 a level to watch) 172.68 is the buy point for new highs.

CHKP - 58.09 / 61.56 bp

CPHD - 37.93 8/29 close of 36.23 is of interest. 41.08 buy point with 40.77 close from 7/22 possibly being an early trigger on that buy point.

Set your alerts for these prices on the bid. I do that because they will only fire off if someone bids at the buy point. The majority of the time the volume will come with that immediately. However, many times it won't; so you have to be Johnny on the spot critiquing the price action and volume making sure it's going to act properly. Put your money on the ones that act right. And be quick to avoid the ones that don't act right. Acting right is Price action that is surging coupled with volume that is surging. Accept nothing less.