http://www.marketthoughts.com/forum/viewtopic,p,6205.html#6205

Posted July 12, 2006.

“I think today is a good day to buy. I’m placing some orders right now. “

So, how am I doing… Beginner’s lucky maybe, as of this minute I’m up 115% since July 17th. I managed to double a separate account in about 3-4 months, and right now that other account is 100% in cash because of my caution of what’s happening in the market right now. That doesn’t mean that I won’t buy something if I like it, but the degree of how selective I’ve become has gone up about 10-fold.

I had 3 “expert” financial advisors in the past and I was essentially zero return over about 10 years taking “expert” advice. One dud lost us 1/3rd of our portfolios, so although this is my first year where I’ve taken complete control, I am doing it with the knowledge of how hard it is to lose 1/3rd of your savings, and that was savings from wages, not from a peak. I think there was about a 20% gain before a 50% crash, so 1/3rd of dollars from wages lost.

Albert,
I agree with what you have to say about cocky versus great!

This has been a great day for comments on the blog! This makes what I do with this blog FUN!

Thank you

The “cocky” trader will need to be vigilant because you won’t have anyone tell you to get out of a position and your gain will be nothing to boast about.

Chris, thank you for your insight and research. For the rest of you, I simply enjoy reading your thoughts and successes. 15% in every trade is nothing to be shy about. Great for you Steven and keep it up!

Some may question why did I close out the position on EDU yesterday with no major MA or trendline violation. There are a few reasons 1) Personal 2) I remember what Chris said to take 15 and 20% gains consistently and you can win. 3) I needed the psychological victory and don’t want to see even this small amount turn into a loss.

As I may have restated in previous posts, as a beginner (first year) on 3 positions starting 2/21/2007 (first trades), I was in the market only 3 trading days until the correction hit on 2/27/2007. That shook me up some and a lesson I don’t forget, so I run with caution right now.

With the warning from Chris in these posts to be cautious, I figure I would just sit back to watch what happens.

A few things I have been watching as part of my education over the few months:

1) While market trend is up, I noted a few flags with the NH-NL ratio:
4/30 and 5/1 – 2 days of Triple digit NL numbers on NH-NL ratio
5/19 – Full week of Triple digit NL numbers on the NH-NL ratio
6/7 – NH-NL strength to 14% from 70%
6/8 – NH-NL strength -23% (90-143)
6/9 – NH-NL strength -28% (75-132)
6/12 – NH-NL strength – 40% (82-192)

2) The NYSE,COMPQ, and S&P 50R weekly charts indicate the movement showed a C to D leg transition recently which I continued to trace from his Feb assessment. His original post found here of using Secondary Indicators:
Indicators and Research Save me Money
http://www.chrisperruna.com/2007/02/28/indicators-and-research-save-me-money/

3) With the market approaching a 30% gain threshold, this will be a pshychological factor on the market and could cause a cool down going into the summer months.

I may not have this all right, but I am trying to be cautious. As a rookie learning outside of my full time work in my spare time, this is what I can see so far, and there may be more that I am missing, but I know as I continue following this blog and reading everyone’s comments and strategies, I have become a better investor over the past months – my appreciation to Chris and all of you.

Thanks,
Steven Mac

I am and always will be confident but never cocky!

However, this game is still 99% mental!

Nice comments guys!!!! Keep ‘em coming!

overt cockiness without a track record = dangerous and suicidal

The difference is who is returning 50% plus gains and who is returning 50% or less gains. I think there is a big difference between the “cocky” bloggers and the “great” bloggers.

3 out of 4 stocks follow the general market so I hope that people are making money in this market. However, nothing is luck in the market. If you are making gains, you are in fact pretty darn smart because I know for a fact NOBODY believed in this rally coming off the Jun/July lows. NOBODY. Very few people actually went with the trend and made money on the way up. If you are just now going long stocks, you are making a mistake. But to call a lot of people cocky I think is a bit much.

I agree with eveyrthing you said but if we were not in a bull market MA BIDU and EDU would not even be happening. So the obvious thing is that stocks are supposed to go up in bull market. You can be cocky, just make sure you have a game plan to sell when you get your sell signals. If you don’t know what they are, you better pick up a book called How To Make Money In Stocks by William J O’Neil.

The best traders may seem “cocky” but in fact we are in complete control of our emotions. Sometimes it is just frustrating when you see the biased liberal media blast this economy over and over so you, by default, want to shove your returns in peoples faces to show them that GWB isn’t quite the evil buggar the ignorant public thinks he is. Now, if these people do not have a track record, that is different. If they do however, calling them cocky is a bit much.

I am wrong often and I will be the first to admit I am wrong but the market does not make me money, I do. If I pick the best patterns with the best price and volume action with great fundamentals and it moves higher. Uhm….that isn’t the market, that is me. I just went with the trend that says 3 out of 4 stocks follow the general trend. Instead of going long TESO and AFSI, I could have picked SUNW. Does that make me lucky? No. It makes me a poor trader.

I can not pick a top either but it sure seems hard to think we are going to top here with NYSE short interest at all time highs with the indexes near all-time highs. That and 70% of the misinformed public believing we are in a recession is enough to think we could have further to run.

Also, where are my climatic charts? I see TNH and CF and KMGB in the leading chemical-fertilizer group but where aree the rest. This simply does not feel like a top. With that said, however, if we do top, this cocky blogger will not be surprised. And I wont be unprepared.

If the indexes selloff below the 50 dma, on more than 5 days of CLEAR distribution, and then fail to make a new high AND I see all those leading chemical stocks, GOOG, RIMM, AAPL, BWLD, CROX, and all the top stock in my portfolio start selling off then I will get “fearful.” However, while I see no major cracks in the armor, the right play is to stay long. NOT go long, stay long.

If you are late, you are late. Chris is right, it is too late to just be buying anything willy nilly. However, I dont know any professionals who are doing that.

This is a great bull market with very few believers. What a great combination.

PS: A gain of 400% might be luck that it went up that much. But it took a “cocky” trader to buy the stock then when everyone was FOR SURE we were near a top. You better be a little cocky, just don’t let it get to your ego.