Author Archive for Jeff White

CyberTrader & Schwab Integration Update

June 15, 2007 at 7:10 pm

A little while back, I discussed how CyberTrader is integrating with Schwab, and the discussion has been somewhat ongoing about what all that will mean. Lots of traders were concerned that certain things they enjoy right now with CyberTrader might not be included unless Schwab’s StreetSmart Pro were to make some improvements. Good news – here’s an update of some details I got today through an email sent by Vincent Phillips, CEO of CyberTrader addressing some of the big items of interest:

Per-share Pricing – CyberTrader’s currently published equity pricing, including per-share pricing, will be honored at Schwab for all current CyberTrader clients regardless of your assets or trading activity. Call Client Services with any questions about your pricing.

Strategy Testing Tools – The same advanced back-testing suite you currently use is already integrated within Schwab’s StreetSmart Pro® trading platform.

Saved Layouts/Watch Lists – Upon integration, your saved CyberTrader Pro layouts and watch list settings will automatically load into StreetSmart Pro. You will not have to learn how to use a new trading platform – it will look quite familiar to you.

Briefing.com Research – In addition to continuing to receive free Briefing.com and MarketEdge research, through Schwab you will also get access to proprietary content like Schwab Equity Ratings, integrated into StreetSmart Pro.

Direct-Access Orders – Schwab’s equity direct-access order-routing technology and tools were developed by CyberTrader. These tools provide clients with choices regarding where to route orders.

Advanced Order Types – In addition to currently supporting limits, stops, trailing stops and alerts with Schwab by the end of 2007 you will also have contingent order-entry capabilities to simultaneously place profit and loss order targets with your buy and sell orders.

Real-time Profit & Loss – Upon integration, you will receive streaming lot-level cost-basis data currently available in your trading platform.

Futures Data – All CyberTrader clients will receive CME® futures data through StreetSmart Pro.

Starting right out with the per-share pricing is great, although they addressed that from the very beginning. Platform-wise, I’m particularly happy to hear that the contingency orders (brackets, OTO, OCO) are still coming, and that futures data will still be available for current CT clients after the integration (since I watch them all day long).

I’ve traded with CyberTrader for several years, so I shared some of the concerns since my experience with CT has been ideal from day 1. I’ve also been a Schwab client for even longer, and I’ve never had a complaint there either. Changes in anything are not always perfect, but it looks like what’s important to me will be kept intact, and unless you’re using an API or placing basket orders, any difference between the two should be minimal. Looks like a nice list and I get the feeling they’ll keep us posted regularly going forward.

Enjoy your weekend & Happy Father’s Day!

Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]

Finding Short Sale Candidates

June 12, 2007 at 5:12 pm

Last week’s market pullback after a very long upside run might have been a change of character. In fact, with Friday’s bounce now having failed, the charts are suggesting some further downside may be in store. When considering the psychological changes that can come with a sudden, sharp correction after such a steady uptrend, there just might be a shift to a more defensive posture by the longer-term players. Bulls with nice gains to protect sometimes view subsequent bounces as second-chance selling opportunities, which can certainly have a slowing effect on the advance, and Tuesday’s turnaround is in line with that. Further, the bears who have been waiting so patiently might now begin to view this recent market weakness as an opportunity.

I’m no perma-bull or bear, I simply let the charts be my guide when it comes to trading the long or short side of the market. However, there are a few things I’ll point out when it comes to finding short sale candidates after a big advance like we’ve had.

It’s important to note that although trading the short side is technically just the reverse order of a long-side trade (with a short sale you sell first and buy back later), in practice it can play out very differently. We’ve already discussed how to get short, but let’s examine 4 related and important characteristics when locating high-probability short selling candidates, just in case this market is undergoing a change of character.

Volume. Trading the short side presents a completely different animal than the long side when it comes to trading volume. To move higher, a stock needs strong volume with new buyers entering the picture to produce greater demand on the shares, so long-sided trades should show improved relative volume. On the flip side, stocks don’t need high volume to move lower. In a skittish market, buyers who are bidding for shares may simply cancel their orders. That means that volume can actually diminish while the supply vs. demand relationship changes. The “heavy” supply in relation to the lighter demand is what leads to the phrase, “stocks can fall of their own weight.”

Chart Patterns. There are a number of bearish chart patterns which represent the psychology of buyers and sellers, helping to provide an edge on the short side when they surface. Being able to locate and correctly diagnose these patterns will help you locate higher-probability trades than arbitrarily deciding that a given stock “looks expensive.”

Failing Bounces. The description speaks for itself, but a failing bounce occurs when a stock has corrected, is trying to recover or “bounce”, and it becomes apparent that the upside momentum will fall short of reaching the previous peak. Initiating a short sale into a failing bounce can present a clear-cut exit (buy to cover at the previous high) as well as a nice entry for when the next wave of selling hits the stock.

Lower Highs. Failing bounces lead to lower highs on the charts, so having a few already in place should mean a downtrend is being established. Each time a stock attempts to recover, it comes under selling pressure again as weak holders unload shares in an effort to raise cash. Lower highs increase the odds of success when trading the short side, implying that the stock has already “topped out.”

Trading the short side can provide you with some nice profits when done properly, and also can be a nice natural hedge against long positions when corrections come. The market isn’t always in bull mode, so keep an open mind to the short side and one of these days you may be glad you did!

Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]

Looks Aren’t Everything

June 11, 2007 at 12:11 pm

There sure are a lot of stocks still in bull mode, even after last week’s dip. I’m seeing a lot of stocks which have the right look to them, but not every single one of them make for ideal trading candidates. Some of them are OK on the surface, but looking a little deeper reveals some character flaws.

This week’s Free Newsletter over at TheStockBandit.com discusses this exact topic, so be sure to stop by and read it for my thoughts on the subject.

By the way, you can sign up for the free newsletter on the Free Newsletter page at TheStockBandit.com and we’ll notify you every time one is published. An opt-in form is provided at the top of the page which puts you in full control of your email subscription at all times.

Trade well this week!

Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]

Dead Cat Bounce or Another Higher Low?

June 10, 2007 at 10:54 pm

Last week we saw bookend gains, but the downside in the middle was just too much to overcome. The indexes finally took a dip which lasted more than a couple of hours, and that’s actually a healthy thing whether you’re bullish or bearish.

This week should be an interesting one as we wait for more clues as to whether the sellers will use the relief bounce to continue unloading shares at higher prices, or if the bargain-hunters are going to resume their usual activity of buying all weakness. One thing is for sure, and that is that last week’s dip helped to shake up many individual stocks, which is a good thing for those of us who trade from the charts. No matter which way you’re leaning this week, be sure to check out this week’s Market View page over at TheStockBandit.com for a closer look at the indexes.

Trade well this week!

Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]

When Patterns Fail

June 7, 2007 at 11:08 pm

Things turned ugly this week for the first time in a while, and a lot of charts actually needed this shakeup. The CNBC headlines and dreary comments of “the worst week since March” don’t actually say much, especially since all we’ve done pretty much since then is climb higher each week. But it’s been a pretty quick correction so I can agree to that.

It’s too late to short sell on this move and a very high-risk spot to buy, so it’s the ideal time to clean out the watch lists and remove the stocks that all of a sudden are simply clutter. Lots of stocks were setting up bullish chart patterns just a few days ago, but in the last couple of sessions they’ve pulled back sharply and negated their patterns. In my book, that’s grounds for dismissal from the watch list!

One example is JRCC, which I highlighted earlier this week in my stock newsletter for members at TheStockBandit.com. The stock had been trending higher and had built a bull pennant pattern, implying more upside could come if a breakout could be produced. Instead of breaking out and triggering a buy for us, it simply sat on the watch list until today when it folded up like a cheap tent, making the pennant pattern obsolete. I’m anything but a camper, so I’ve removed this one from my watch list. Here’s a look at the failed pattern:

(Click for full-size image, courtesy of TeleChart)

The good news is that we never bought this stock because it never broke out. That’s the beauty of trading from the charts. If the expected move never comes or the stock reverses entirely, it doesn’t even matter. And that’s a far cry from trying to be overly anticipatory and buying before the chart says it’s time to.

This volatility in the market is going to keep the trading environment good for a while, and the pullback will help to produce lots of new setups for trading in the coming weeks. In the meantime, keep those watch lists streamlined with stocks that look ready to move, and get rid of everything else. It’ll help you move faster once it’s again time to buy. But not yet.

Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]

Trading Multiple Timeframes

June 4, 2007 at 10:27 pm

It’s such a strong market right now that if you’re trading the long side, there are lots of opportunities across multiple timeframes. An excellent way to diversify your trading (which I’ve discussed before) and boost your bottom line is to Trade Multiple Timeframes.

This week’s Free Newsletter over at TheStockBandit.com discusses precisely that. So, if you’re interested in learning more about putting your money to work for you across multiple timeframes, be sure to stop by and read this week’s Free Newsletter for my thoughts on the topic.

By the way, you can sign up for the free newsletter on the Free Newsletter page at TheStockBandit.com and we’ll notify you every time one is published. An opt-in form is provided at the top of the page which puts you in full control of your email subscription at all times.

Trade well this week!

Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]

Gauging Urgency in Chart Patterns

May 24, 2007 at 7:51 pm

As a chart pattern trader, it’s all about the price action for me. My research isn’t based on company fundamentals or what some analyst is predicting for the next year – it’s based solely on supply and demand as reflected in the chart.

I trade common patterns like flags, pennants and triangles, all of which provide continuation plays within uptrends like we’re seeing right now. The patterns themselves present clear-cut entry and exit levels for my trades, so identifying them is certainly a key part of my method.

However, once I’ve identified a technical setup that I like, my focus then turns to the price action within the pattern. Doing this gives me a much better indication of just how antsy the stock is getting. Watching support and resistance levels within the pattern gives me these clues. A stock which is itching to break out is going to be perking up to test resistance, while one which is acting sluggish will generally be hovering at support.

An example of this can be seen in AMZN, a stock we just closed out Wednesday at TheStockBandit.com. We caught 5% at the first target on the first day, and 11% at the final target on the 3rd day. It was a great pop, but let’s look at how the setup developed.

I first listed AMZN in the Bandit Broadcast stock newsletter on May 3rd as it started to create a nice base following the run it made on the earnings announcement. This implied another wave of buying, so I set it up as a swing trading candidate for members. Here’s the chart I showed that night:

(Click for full-size image, courtesy of TeleChart)

The stock didn’t break out for a few days so I highlighted it again to provide an update on how it was progressing. Again I stressed waiting for the buy point before entering, which serves as our confirmation that the stock is headed in the anticipated direction. Here’s the chart I showed May 7th:

(Click for full-size image, courtesy of TeleChart)

A week later, AMZN was trading in a channel pattern, which would ultimately serve as a nice launching pad for another upside move if resistance could be cleared. Here’s the chart from May 14th:

(Click for full-size image, courtesy of TeleChart)

The final indication came when AMZN started to turn up late last week, and you’ll see in the chart below how it moved to the top end of the channel before finally breaking out on Monday when we got our buy signal as AMZN finally hit our trigger price at $63.85. We took partial profits on Monday into the initial move, held it 2 nights and took the rest Wednesday at $71.00 (11%). Pretty nice for a 3-day trade. Here’s the chart at the time of our exit, looking a bit short-term extended and due for a rest:

(Click for full-size image, courtesy of TeleChart)

So the next time you spot a nice chart pattern, remember to measure how well the stock is acting within the pattern. It might indicate that more patience is required before your buy signal is triggered, but once it perks up you’ll know the time is getting close.

And patience pays!

Jeff White
President, The Stock Bandit, Inc.
Take the Money and Run!
www.TheStockBandit.com

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]