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Thursday, August 25, 2005

Swing Trading vs. Scalping: The Pros And Cons

Swing Trading vs. Scalping: The Pros And Cons
By TradingMarkets Research
Wednesday August 24, 11:21 am ET
The smaller a timeframe chart, the more random price action appears to be. The further one dials out a view to larger charts, the clearer price action movement becomes. That is fundamentally true because the action slows down. It is easier to hit a slow-pitch softball than major league fastball. Right or right? Get real good at hitting a major league fastball (along with a few other skills) and profit potential there is enormous. But how many new baseball players are truly able to do that?

Scalp trading successfully requires THE GREATEST degree of focus on charts, speed of decision making, personal discipline, everything that is necessary for success.
Read further:
Yahoo! Finance: Swing Trading vs. Scalping: The Pros And Cons

See also:
My Trading Room: Link about Scalping Vs. Swing Trading

Wednesday, August 24, 2005

Update: Stocks to Watch: BCON

BCON is making another amazing trading day, currently at $5.26 (+10.97%), yesterday's high is at $5.10.

See also:
Stocks to Watch: BCON

Stocks to Watch: BIDU

Baidu is finally fading. If it doesn't show any strength later today, there's a big possibility that Baidu shares are heading to major falloff.

BIDU is trading at 76.34 (-6.9%).

News about Baidu in
Baidu forecasts a slowdown in revenue growth -- FT, China's leading internet search company, expects revenues to rise by between 11 and 16 per cent in the third quarter compared with the previous three months, a marked slowing in the new Nasdaq star's sequential sales growth. The revenues mainly come from the sale of advertising links that appear alongside its website's search results, a model that emulates that of global search giant Google.

However, questions have been raised about the sustainability of its "MP3" online music search service, which accounts for more than 20 per cent of traffic to the site but which has been targeted by music publishers for allegedly promoting piracy.

Talking about Google Talk and Skype

Google is widening its scope again, a few days ago it presented a desktop sidebar, now it announced a brand new instant messenger – Google Talk. They have also included the possibility to take voice calls.

Google Talk is really bad news for Skype. Although, Google Talk does not have the features that make money for Skye (i.e. Skype out), it is just a matter of time when these services are included also in Talk. Yes, Skype has some edge, they were the first in the market, but Google has enormous amount of money. And Google has "Google". That's why Google Talk will probably get more downloads in the first day than some other applications during their lifetime.

If Rupert Murdoch's $3 billion offer for Skype was not a rumour, I think Skype's venture capitalists lost their best opportunity to sell it.

See also:
Subzero Blue: Google Talk
Ambot ah!: Google Talk, the next best IM?
Connected Internet News: New Google Desktop - I'm not impressed GoogleOS? YahooOS? MozillaOS? WebOS?

Coverage of $3 billion offer for Skype:
Asia Business Consulting: News Corp wants Skype - and what is their intention?
loose wire: Was the News Corp Offer for Skype Real?
Good Morning Silicon Valley: Fine, I'll just set aside the $3 billion for the bloody toll calls to Lachlan

Tuesday, August 23, 2005

Stocks to Watch: WES, WFSI

Both, WES and WFSI are currently halted.
Westcorp confirms discussions regarding combination (63.30 +5.95)

Co confirms that it was in discussions regarding a possible business combination. Westcorp indicated that absolutely no determination has been made as to whether any business combination would be in the best interests of Westcorp's shareholders. As previously reported, the approval process for the conversion of Western Financial Bank to a California state commercial bank and the merger of WFS Financial into Western Financial Bank as a part of the acquisition of the minority interest in WFS Financial is taking longer than originally expected, and the co has been exploring other alternatives. Any such business combination would be an alternative transaction to the pending merger and related charter conversion, originally announced in Westcorp's May 24, 2004 press release. (Both WES and WFSI are halted.)

NYT on Providian Financial (PVN) Acquisition

And They Call This Advice?
The New York Times
Gretchen Morgenson
Published: August 21, 2005
WILL shareholders of the Providian Financial Corporation, one of the nation's biggest credit card issuers, approve their company's merger with Washington Mutual?

Owners of Providian will vote on the proposed deal on Aug. 31. Under its terms, they will receive just under $19 a share in cash and Washington Mutual stock. That price represents a modest premium of 4.2 percent over the price of Providian just before the merger announcement.

David L. King, a portfolio manager at Putnam Investments, has said he will vote against the merger. The funds own 7.5 percent of Providian's shares. Officials at Providian have said that the deal is fair.

In its report, Glass Lewis said it believed that Providian was worth $21 to $24 a share. It said the company's business was performing well and could easily remain independent.
Providian Financial Corporation (PVN) is currently trading at $18.74, slightly below the possible take-over price.

Read further:
The New York Times: And They Call This Advice? (free subscription required)

It's a stock pickers market

Jack Rothstein writes in his blog that the index funds are not performing well and it's a stock pickers market.
Cash rich in managed accounts this being the season of weakness. The shorts balance the longs in the fund. Selectivity is the key to success. It is a stock pickers market. You have little chance of index funds delivering a satisfying performance. The major market averages are flat to down for the year. It’s a flat market. Performing in a flat market requires the ability to pick stocks in a timely manner. Pick and clip advancing and declining stocks in a timely manner.
He highlights some long and short candidates and gives a comment for each (BCR, BEAV, GE, ISIL).

Read further:
Jack Rothstein: Longs & Shorts, Always

See also:
Saying Goodbye to Buy-and-Hold

Monday, August 22, 2005

Today's Earnings: WPTE

WPTE crashes with earnings report:

Reports Q2 (Jun) loss of $0.02 per share, $0.06 worse than the Reuters Estimates consensus of $0.04. Revenues rose to $6.6 mln vs the $5.9 mln consensus. Overall gross margins were 33.7% in Q2 compared to 43.9% from prior year period. Co issues downside guidance for Q3, sees Q3 revs of $1.5-2.0 mln vs. $4.82 mln consensus. (

WPTE currently halted.

ERES Insider Buying, Shares Up

Insider buying in Eresearch Technology (ERES), Blum Capital Partners LP has bought a lot of ERES shares lately, see insider transactions at Form4Oracle.

ERES running up 5% today.

See also:
Roberto's NasdaqTrader: ERES Insider Buying

If the Contrarians Are at the Gate, They May Just Be Lost

There is some reading about VIX in The New York Times:

If the Contrarians Are at the Gate, They May Just Be Lost
The New York Times
By Mark Hulbert
Published: August 21, 2005
The VIX currently stands at 13.42, which is lower than about 79 percent of the index's past readings. Its historical range extends from a low of 9.31 in December 1993, to a high of 45.74 in October 1998.

The exchange refers to the VIX as an "investor fear gauge," and the index quickly found a following among a group of market timers known as contrarians. They believe that the stock market rarely moves in the direction that the majority expects; therefore, they are bullish for the overall market when the VIX is high and indicating widespread investor fear. By the same token, they are bearish when, like today, the VIX is low and betraying investor complacency.

Researchers, however, have been able to find only partial historical support at best for this interpretation of the VIX. According to a recent Hulbert Financial Digest study, the stock market has indeed tended to turn in an above-average performance following very high VIX readings - just as contrarians say. But contrary to what contrarians believe, the stock market has also produced above-average returns following very low readings.
Read further:
The New York Times: If the Contrarians Are at the Gate, They May Just Be Lost

See also:
Raising Volatility
VIX conundrum
Low Market Volatility

Day Trader's Thoughts on Day Trading

Trader Mike writes about his switch from swing trading to day trading. There are some good practical issues to memorize.

Mike writes about switching his commission structure at his broker and gives even a slight insight into his trading tactics. He also doesn't afraid to mention his win/loss ratio, which is 45.05% at the moment, but still making money (actually, it shouldn't be a surprise to anyone that it is possible to make money even if with a win/loss ratio below 50%, like it is possible to lose money with a ratio above 50%).

Read further:
Trader Mike: Thoughts on Day Trading

NYSE Short Intrest At Record Highs

Roberto's NasdaqTrader:
Short interest on the New York Stock Exchange rose 2.7 percent to a new record high in August, signaling bearish sentiment, according to information the exchange released on Friday. As of Aug. 15, the number of short-selling positions not yet closed out rose to 8.59 billion shares, up from 8.36 billion a month earlier.