New Buy:(ACM)

Today I bought (ACM) again. I felt that it formed a handle with a $31.15 buy point and my order was executed at $31.19. The handle was not ideal as volume didn't drop as the handle formed, however the shape is good and it's formed in the upper part of the overall cup pattern.

I think what keeps bringing me back to (ACM) is the overwhelming strength it's shown for the past five weeks - all up on heavier than average volume. This is the kind of quality in a stock that will cause me to overlook characteristics like a flawed handle or a weak industry group rating.

I also see the overall market showing strength one day after another. Again today the indices dodged a distribution day following the accumulation day yesterday on the news of the Fed lowering rates to 0%. If I looked purely at the indices and ignored the daily news (which is what I'm training myself to do) I'd think we're in a solid bull market.

There are however some caveats. For one thing, volatility remains extremely high. This factor alone can frustrate even the most seasoned investors. In times of uncertainty I react by using tighter stops on my buys, increasing the likelihood they will fail, creating more uncertainty (fancy word for fear). Certainly it's prudent to limit my risk when the market is unsettled, but I wonder at times if keeping such tight stops creates a self-fulfilling prophecy.

The other issue I see is a lack of quality stocks breaking out of sound bases. This may take some time to develop but for the time being I don't see any obvious market leadership.

I'll continue to evaluate these factors, but I think when you cut through all the crap the bottom line is investing is tough in a bear market and less tough in a bull market. It's easy to look dumb right now. I don't mind taking chances when I feel the market warrants it, as I do now. However, if I stop out again I will put myself in the penalty box for three weeks - barring myself from any new buys during this time period. I've read about similar strategies and feel it's an effective move. Whether the problem is me, the market, or dumb luck, if I'm striking out it's time to step away and get a new perspective.

Anyway, it would help me to relax and enjoy the holidays.

-Geoff

Stopped Out (THOR) and (ACM)

Stopped out of both of my positions yesterday, I had moved the stops up a bit so I took about a 3 to 5% loss on each.

This market continues to whipsaw, yet it doesn't roll over. As I'm typing this it's absorbed the news that the auto bailout was voted down and is now trading positively.

I can't predict the market and I won't try, but I'm still seeing evidence of a rally here. Whether or not it's tradeable remains to be seen - my results have been poor so far.

I've got one stock left on my watchlist that is setting up for a possible buy point next week. If I have another failed buy however, I will put myself in the penalty box for three weeks. I've heard of this strategy and I like it. No matter what the market is doing, if I fail on three to five trades in a row something is wrong and I need to take a break and re-evaluate.

New Buy:(ACM)

I added (ACM) to my portfolio today. This stock comes from a weak group (builders) but it's an infrastructure play. I like the chart a lot, it's had heavy accumulation the past 4 weeks or so. It's close to a 52 week high and after that an all time high, and it IPO's within the past few years which is also good.

On the downside, I probably bought a little high. IBD described the ideal buy point at $27.30 based on a cup with handle pattern. If it did form a handle, it's flawed. I actually think this stock can be purchased when it clears the whole cup pattern at $32.51.

Once again the market had an alright day, down but on lower volume and the volatility seems to still be easing down. The holidays might help that to come back to normal levels.

New Buy:(THOR)... and a Confession

I have to admit I purchased and stopped out on a stock last week: (EBS). It's a great stock I had no business buying. It was nowhere near a buy point and I basically just took a stab at it, stopping out the very next day. I didn't post about it because I was so disappointed in myself - but of course that's not the right way to handle a mistake. Instead I'll post it here and use it to remind myself not to be such a dope next time.

I do see a real change in the market the past week and think we could have a tradeable rally here. Suddenly the market is acting well, shrugging off bad news and powering higher.

My problem is that work has me so busy right now I probably don't have the time, attention, and emotional fortitude to be in the market. I've had 4 days off in the past 5 weeks, and I'm exhausted. It's taken a toll on myself and my family. I'm doing what I can to change the situation and believe I'll be in a different organization early next year, but for now life is very chaotic. This is not the ideal scenario for investing.

It's hard enough for me to keep a level head under normal circumstances, now I find emotions dominating my investing actions. I have a nice watchlist but I was plagued by doubt and missed the buy point on (ACM) while I purchased (THOR) at $29.68 only to see it close slightly below the $29.60 buy point at the end of the day.

Sticking with the theme that the system is where my success will come from, not some grand stroke of genius on my part, I'm going to have to find a way to handle this market without emotion or just stay out altogether.