Update for the Week

Let's set the goal for our challenge to 100% return, and find out how quickly we can make it!. After closing the AMLN trade, the account had not been moving much, the CREE trade was closed out (apparently prematurely, I might ad), but the new trades in the account AVID, DE and AMTD are doing well, so the account seem to be in the right path again.

This might be a good time to look at the big movers for the week, and see if any of you have a favorite, or can identify a long-term, strong catalyst, that may propel a stock much higher or cause the breakdown in the market cap of another. I used the Platinum search capabilities to identify these stocks moving over 5% in one day with a larger than 200% increase in average volume. Please DO participate:



In the meantime, let us recap the CREE trade, and where our trade could have gone wrong. Notice how it is NOW that the stock may have completed the rebound and has begun its descent. If that is the case, we entered the trade prematurely, violating our rule of "patience". Often, I tend to jump into a position thinking that I may miss out on the big move. More often than not, it is only 1 month later that the stock is once again ready for the continuation of the trend. If there is a trend reversal, we would have known by now. Although CREE attempted to do that, the bounce is now weakening.



Looking at the Fibonacci retracements, note that my previous selection was from the high of the previous day (before the drop), instead of selecting the high just before the begining of the downtrend. IF I had selected that high, I would be entering the position now, and not 3 weeks ago. I would be putting a contingency order at 28.10, and my PRC at $25.

I could re-enter the position, but I think that "bargaining" is the worse thing you could do. Playing a game of "chicken" is counterproductive, and your ego gets in the way. Here we move on, understanding that there are plenty of opportunities out there.

At the same time we picked CREE, we also selected RRGB. The catalyst seemed strong and long-term. So, while we patiently wait for today's candidates to take their bounce (bearish trades), let us set a trade for RRGB. I will have used most of the cash available now, yet there are still plenty of candidates for my system.