Reader query: “Any thoughts on APWR?”

Upon pulling the chart, I initially see that the stock is in a downtrend, so it is bearish. I am biased to the long side at the moment, so my first inclination is to pass–not go long or short it.

APWR

However, though the trend in APWR is down, the trend can change—it can turn up. Every new trend starts with a countertrend. The stock is going down now (the trend is down), but it won’t go down in a straight line. There will be countertrend moves within it’s overall downtrend. At some point, one of those countertrend moves will be a bottom, and the beginning of the new trend–an uptrend.

It is possible that the formation of APWR fits this countertrend criteria. So before I buy, I will wait for buying. In other words, I need to see some demand off of this bottom. I need to see buying behavior before I “buy into” the behavior. One of the greatest rules of trading is a converse conversation:

“Don’t buy into selling; buy into buying. Don’t sell into buying; sell into selling.”

Write that down.

Studying the chart in zoom, I decide I will wait for the price to move outside of the regression channel, and when it does, I will buy. I’ll always use a stop, so I will set my initial stop under the bottom pivot (red line). Stops have saved my life several times. I am sure they will again.

APWR Countertrend Oil on canvas

Every new trend starts with a countertrend. The end of one thing is the beginning of another.

And the beat goes on.

The markets move like the ocean, and I am but a drifting trader weaving in and out of the waves. Sometimes the sets come in with such poetic, rhythmic motion that the probabilities within almost chant like a lucid, soothing mantra. Other times, there is so little visibility and the tides are so variant that there is no predicting the next swell or crest. Some find it reassuring to believe that Mother Nature is predictable, but it truth, she is not. She simply beats to a rhythm.

The charge of the trader is to know that you won’t prevail in every attempt–you can’t catch every wave. You can be riding the most picture perfect trend, and it can fall apart without any warning at all, like a tunnel turned breaker. We can take solitude in the fact that a new wave will always takes it’s place. Opportunity always abounds in places where buyers meet sellers and vice versa.

As a journalist of finance, I must understand one thing for certain: there is no such thing as Objective Journalism. I am not pretending to be objective here in these pages. That would be a joke. I think Hunter Thompson summed up the theory of Objective Journalism when he covered the campaign trail in 1972.

“The only thing that I ever saw that came close to Objective Journalism was a closed-circuit TV setup that watched shoplifters in the General Store at Woody Creek, Colorado. I always admired that machine, but I noticed that nobody paid much attention to it until one of those known, heavy, out-front shoplifters came into the place…but when that happened everybody got so excited that the thief had to do something quick, like buy a green popsicle or a can of Coors and get out of the place immediately.

So much for Objective Journalism. Don’t bother to look for it here–not under any byline of mine; or anyone else I can think of. With the possible exception of things like box scores, race results, and stock market tabulations, there is no such thing as Objective Journalism. The phrase itself is a pompous contradiction in terms.”

I attempt to paint a picture of my particular vision of probabilities, and it is a perception that will not be replicated in mass prints. As the subject, I can’t possibly be objective. The mere fact that someone may read these pages will make this trader potentially observed. As Heisenberg states, “the observer changes the thing observed.”

By writing about things I contemplate, it is possible that I become observed. In becoming observed, I will change. The observer changes the thing observed. So why write? Why invite observation? Because it will make me better. Because it is time. Because it will challenge me more. My “read” on the markets will have more clarity. The more I benefit others, the more I am observed, and the better that will make me.

All along, I have the good fortune to chronicle for the world the thoughts of a speculator who thinks about winning not in terms of frequency of correctness, but by magnitude of rightness.

Peace

The Impersonator

To everything - turn, turn, turn
There is a season - turn, turn, turn

-The Byrds

It is time to go short again.

The market has been inching higher on light volume.  Yesterday’s sell off is an ominous sign.  It is a tell for tomorrow’s economic numbers.  They will not be good.

It is time to ride the next wave lower.  I said I’d let you know when.  It’s time.

Peace

Peace

At Least my cage is filled with light
I have a cage
It’s called a stage
When I’m let out
I run about
And sing and dance and sweat and yell
I have so many tales to tell
I like to push things to the edge
And Inch my way along the ledge
I feel Like God, I feel like shit
The paradox, an even split
It’s just a job, I always say
I should be grateful everyday
Sometimes I think I just can’t do it
But I persist and I get through it
And I console myself each night
At least my cage is filled with light

-Madonna

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