RSSArchive for March, 2006

Tuesday T-Shirt Trivia Two

March 21, 2006 at 10:59 am

The Stock Bandit T-shirt

One of the nice things about trading is that you can wear a t-shirt and jeans every day. But, wearing part of this morning’s Krispy Kreme jelly doughnut blowout doesn’t look too pretty. Win today’s trivia and get yourself a replacement!

Oh, and wear a bib next time.

Now let’s get to the main event!

Only a few rules apply:
1. You must use the contact form when you submit your answer.
2. Include your name & mailing address when you submit your answer.
3. Only the first completely correct answer submitted will win a t-shirt.

Today’s 2-part T-Shirt Trivia comes from an episode of Seinfeld (one of the very best shows out there).

In one particular episode, George Costanza pretends to be a marine biologist to impress a woman and he saves a whale.
– What did they find in the whale’s blowhole?
– How did that object get there?

George Costanza

If you know the answer, send me your name & address via the contact form, and the first to correctly answer both questions wins today’s t-shirt! Good luck!

T-shirt Trivia

Jeff White
President, The Stock Bandit, Inc.

I Love A Good Deal!

March 20, 2006 at 2:18 pm

This is an excellent dip-buying market, but you’ve got to know how to do it right if you want your trade to be a winner!

The idea of buying stocks on a dip sounds nice, but it isn’t easy to put into practice. Some people think that buying a stock on a dip means that any weakness should be bought. Well, what defines a dip? It depends on the timeframe! When do you know that a stock has finished “dipping” and is now ready to turn higher? Should every purchase be made on a dip?

My standpoint (and that of is not to buy any stock just because it looks “cheap.” Buying a stock simply because it’s at a lower price than it once was is never a reason to buy in my opinion. Maybe you can shop on the weekends that way, but in the trading world, you’ll often pay dearly when you buy weakness. I wouldn’t buy a stock that just got pounded, even if it is much cheaper than it’s ever been. In fact, you’d probably be far better off short selling a stock on a 52-week low than buying it.

The only time to buy a stock is when you think it’s going higher.

Having said that, the only time it makes sense to buy a stock on the dip is when it’s in the middle of an uptrend! During an uptrend, a dip is merely a pullback which sets up a new pivot point for buying. What’s also nice is that pullbacks within uptrends also produce natural stop-loss areas which let you manage your trade much better than buying blindly. So, let’s see an example of what buying a pullback looks like.

Last night, BWNG popped up on my scans as an uptrending stock that appeared to be completing a pullback within the trend. The stock had great recent momentum and had pulled back slightly off the highs but mostly was moving sideways. A well-defined trend line was seen along the highs of the past couple of weeks, which provided us with an excellent swing trading pivot point. I highlighted BWNG in my stock newsletter last night with a $13.00 buy point.

BWNG BWNG is in a well-defined uptrend, and the minor pullback presented an excellent buying opportunity for us at this morning when it cleared $13.00.

….. and so far this stock is rocking to the tune of more than 11%….

BWNG Intraday Chart BWNG has been smooth sailing since it triggered our $13.00 buy point this morning, giving us a very nice (and quick) profit of 11% and counting.

When you commit to buying the dips, be sure you’re doing so when there is an uptrend intact! Don’t buy a downtrending stock that will leave you feeling more like a stuckholder than a stockholder. Buying pullbacks within uptrends can give you a great initial move and put your trade well into the black right from the start!

Jeff White
President, The Stock Bandit, Inc.

Attention Topless Traders!

March 20, 2006 at 1:47 pm

That tan of yours isn’t cutting it yet, so please clothe yourself! And why not do it with a t-shirt from!

Tomorrow you’ll have another chance at the T-Shirt Trivia with another random question that could win you some new casual threads. Don’t miss Tuesday T-Shirt Trivia here tomorrow at 11am ET!

Jeff White
President, The Stock Bandit, Inc.

Changing Gears

March 15, 2006 at 11:39 am

The market is always in motion, so if you don’t like how it is, just wait a little while and it will change! JP Morgan has been quoted as saying that “Prices will fluctuate.” Knowing that, we as traders have to stay on our toes and plan accordingly for the changes that might take place just around the corner. If the market is range-bound, we can expect at some point that a trend will develop.


Yesterday, the S&P 500 finally broke out of its trading range when it closed above 1295. For that index, it was a significant technical event as it made new recovery highs from the bear market. However, the NAZ was a different story. Although it posted solid gains, it remains in the middle of a well-defined trading range. But it won’t forever (even if it feels like it might!).

So, what do we do to prepare for a breakout (or breakdown)? I’d suggest two ideas toward preparing for a market shift:

Have a shopping list ready. You take one to the grocery store so that you don’t forget anything, right? After all, a place with no windows or clocks and nothing but food can get pretty disorienting! Keep a shopping list for potential trades too. Have a running list of the stocks which are poised to move with the market in case it breaks out. Be picky, but know which ones are your go-to stocks when you need to deploy cash. Once the market gets moving, you’ll know exactly what to do.

Refine your game plan. Keep an eye on key market levels that would trigger a breakout or a breakdown. Have an if/then plan in place. This is so simple that it’s often overlooked by traders, but don’t make that mistake. If the indexes rally above key levels, then it’s time for you to take action. If the indexes crack key support, then it’s time for some short selling. And of course, if we remain range-bound, then it’s naptime!

The market will at some point get out of this tiresome trading range, and when it does, you don’t want to get caught in a panic. Know which stocks you’ll want to buy if and when the market is able to break out, and keep an eye on key market levels so that you’ll know just when it’s time to get busy.

What are some ways that YOU get prepared for market shifts?

Jeff White
President, The Stock Bandit, Inc.

The Results Are In!

March 14, 2006 at 5:14 pm

The results are in, and the t-shirt for the large bills trivia has been claimed! Congratulations to D.M. of Chapel Hill, NC for winning the first ever T-Shirt Trivia at! He knows the importance of doing your homework and it showed in his ability to dig up the answers! D.M., your t-shirt is on its way!

The correct answers were:
$500 Bill – William McKinley or John Marshall
$1000 Bill – Alexander Hamilton or Grover Cleveland
$5000 Bill – James Madison
$10,000 Bill – Salmon P. Chase

Those of you who answered correctly but weren’t the first to do so, take heart! Next week, T-Shirt Trivia will return on Tuesday and you’ll have another shot at it. Thanks for participating and for reading!

T-shirt Trivia

Jeff White
President, The Stock Bandit, Inc.

Tuesday T-Shirt Trivia!

March 14, 2006 at 9:14 am

The Stock Bandit T-shirt

As part of my ongoing effort to clothe homeless traders, I’m starting a weekly fun segment called T-Shirt Trivia! For the next little while on Tuesdays, I’ll put up a random question (which may contain multiple parts), and the very first person to contact me will win a T-shirt from!

Homeless Trader Buying BIDU at $150.00 proved to be a mistake for this poor trader. There’s always hope though. Let’s hear it for wireless networks!

Only a few rules apply:
1. You must use the contact form when you submit your answer.
2. Include your name & mailing address when you submit your answer.
3. Only the first completely correct answer submitted will win a t-shirt.

Now, let’s get started!

Because we trade for the money, and it’s about more than “just the Benjamins,” this week’s trivia question pertains to some “paper” of the past. The first person to correctly answer (first & last names) whose pictures are on the front of the following U.S. currencies wins this week’s shirt:

– $500 Bill
– $1,000 Bill
– $5,000 Bill
– $10,000 Bill

If you know the answer, send me your name & address via the contact form, and the first to correctly identify who’s on the front of each bill wins. Good luck!

T-shirt Trivia

Jeff White
President, The Stock Bandit, Inc.

The View From the Hammock

March 13, 2006 at 10:03 am

Trading requires lots of “knowing when’s.” Knowing when to buy is as important as knowing when to sell. Knowing when to trade big is as important as knowing when to cut back on your position size. And knowing when to be active is as important as knowing when to walk away from the screens and do nothing.

The market is in a tough spot right now from a trading standpoint. There are not a lot of good setups for initiating new trades, and that leaves only two choices: either lower your standards for what comprises a good setup, or be willing to sit on your hands and wait for better opportunities.

On Tuesday and Friday of this past week, I chose to stand aside. I had no swing trading candidates in my newsletter. They just weren’t there!

There were a few reasons for this. First of all, the market is stuck in a trading range and it lacks a trend (this alone leaves fewer setups with so many stocks stagnant). Secondly, there were no stocks that jumped out at me after running my scans and searching the lists that I couldn’t live without. And finally, I’ve been seeing fewer stocks find follow through out of good bases.

As a result, I was able to set my entry orders and stops and tend to other matters during those two trading days (like taxes – UGH!). While I would have much rather been trading heavily and watching things run, the odds were that dips would be bought and rallies would be sold. It turns out that’s about what we got.

When you run your screens and you come up with nothing to trade other than some decent-looking patterns, be willing to pass entirely. The trading year is long, and there’ll be PLENTY of times to be active in the market.

Sacrificing quality trades for quantity seems to lead to losing streaks for me (and commissions for my broker), so I’d personally just rather preserve capital, manage existing positions, and get some other items crossed off my to-do list. I know that the market conditions will improve, and when it does, I’ll need my full ability to focus!

Jeff White
President, The Stock Bandit, Inc.