Reading the Tape Seminar

On Monday 2/15 at 11:00 AM (EST) SMB Capital invites you to participate in a Free Reading the Tape Seminar at our office in downtown Manhattan.  Reading the Tape is a skill held by professional traders that allow them to discern the next most likely direction of a stock.  This is a skill that very few new traders have developed and places them at a disadvantage to other market players.

The Advantages of Reading the Tape are:
1) Entering your positions at better prices
2) Find trading set ups not apparent on our charts.  Charts are a lagging indicator.  The tape is a leading indicator.
3) Increase your consistency, win rate, with your best set ups
4) Load up, load up at the right time, while limiting our downside

Mike Bellafiore (Bio) and Steve Spencer (Bio) will introduce this topic and then GMan (Bio) will show specific trades where this skill helped him make superior trading decisions.

For more about the importance of Reading the Tape please see the links below:

http://www.smbtraining.com/overview/smb-reading-tape

http://www.smbtraining.com/blog/reading-the-tape-trading-the-open-video

Those interested please send us an email to seminars@smbcap.com.  There is limited availability for this seminar and you must receive confirmation from us that we have room for you.

rOy

A Trade2Hold- HAS Exit (if it trades against you)

Who knew I was short the strongest stock in the market?  The stock gapped up.  Then buyers stopped paying the offer.  The stock broke its intraday uptrend.  And I shorted two lots with a Trade2Hold.  Well that didn’t work out.

HAS, Hasbro, reported before the Open and beat on revs and the bottom line.  Apparently someone is buying toys again.  On the one year chart there was no resistance.  HAS started an intraday downtrend.  34.30 held the offer on the tape.  I added more to my short position from 44c.

I entered stops of 31c, 36c and 60c got up and went to take care of a personal matter.  When I returned I was completely flat in HAS.  Well that is not good.

The teaching principle for this trade?  For Trades2Hold we must set stops if the stock trades against us.  When trading multiple lots we need multiple stops.  I close out almost all of my positions manually but with Trades2Hold I will use stops.  For a Trade2Hold you cover only when there is a Reason to Cover.  And one such reason is if the stock trades against you, hitting a price that you set as your stop.

There was too much bid buying on the way down.  Stocks like HAS that gap up almost never buy so much stock on the way down.  They drop out and the tape foreshadows the weakness generally.  My short position ambition was bigger than my trading senses.

Overall this was a good trade.  I opened an excellent risk/reward short.  But HAS wasn’t weak enough on the tape for me to be short two lots.

Later I learned that I had started this short in the strongest stock in the market.  Brilliant Bella!  Above 34.60 I did start a long position and a tweet exchange with @sellputs about its chances of trading well through 35.  @sellputs wasn’t optimistic.   I held not seeing any weakness on the tape yet cautious of price.  HAS closed strong, but well below 35 and is on my radar for tomorrow-especially above 35.15.

Best of luck with your trading! Don’t forget to follow us on Twitter.

Long HAS

SMB on StockTwitsTV

Earlier today, SMB Capital’s Steve Spencer appeared on StockTwitsTV to discuss the Market and the stocks in play for the day. Watch the clip here. SMB Capital appears on StockTwitsTV every M, W, F at 2pm so be sure to tune in.

Don’t forget to follow us on Twitter.

StocktwitsTV – Live From the SMB Classroom with Bella

Yesterday, SMB Capital’s Mike Bellafiore appeared on StocktwitsTV to discuss Trades2Hold. Mike discussed how to identify Trades2Hold and which Trades2Hold work best for this Market. In case you didn’t take a break from the Super Bowl to watch the show live, you can watch clip here. Mike appears on StocktwitsTV every Sunday at 8:30pm so be sure to tune each week to watch the show.

Don’t forget to follow us on Twitter.

SMB Morning Rundown – February 8, 2010

Today, the Market appears set to open slightly higher. The levels we are watching in the SPY are 106.80-107(res) and 106.50(sup). Above 107, the next resistance level is 107.40. Below 106.50, the next support levels are 106 and 105.30.

Our best AM Idea for today, which we highlighted in our AM Meeting is to buy FCX on on a pullback close to 69.30. Tgts: 70.50, 72.50.

Don’t forget to follow us on Twitter!

Awesome Links of the Week

A thoughtful contribution to the discussion about HFT.

An amazing video on perhaps the next LeBron James from Daniel Coyle’s Blog, the author of the exceptional book for all those interested in elite performance The Talent Code.  Just watch the myelin being built in this video.

Humorous video of a discussion between Hayek and Keynes on our latest economic crisis.

The importance of competitiveness for the entrepreneur.

StockTwits and SMB will hold a panel discussion at the Money Show Monday 2/15 at 8AM.

Informative video on the fiscal difficulties in Greece that weighs on the US markets.

Excellent post by Kevin Hughes on the mindset of a professional trader.

What CSCO’s earnings report means to tech going forward.

A few years ago I was stretching at the Reebok Club in NYC.  The Reebok Club is everything anyone outside of NYC would visualize a swanky health club to be.  Actors, models, professional athletes like ARod are commonplace.   The gym is six floors, with a pool, two full basketball courts, a locker room with showers, shaving cream, razors, hair spray, you name it.   Every class you could imagine is offered.  It is the one thing in NYC that I actually believe is underpriced even at rates ten times what most pay a month at a gym.  It is one of my favorite places in NYC.

A tall, lean gentleman whose face I could not quite make out was doing some unique exercises that caught my attention.   After every exercise the young twenty something athlete made detailed notes in a notebook recording his work.   His core was as strong as an oak tree.   After one exercise he wrote in his notebook, and then moved on quickly to the next exercise.   His focus and attention to detail were memorable.  This young man went on to win a Super Bowl for the NY Giants.  It was Eli Manning.

As I watch tonight’s game I will be reminded of how meticulous and dedicated Eli was with his injury prevention exercises. As the younger brother of Peyton it is not a stretch to conclude he learned the importance of hard work from Peyton.

Congratulations to GMan for Making Partner!

We would like to congratulate Gman for making partner at SMB Capital.  Gman has been trading with us for almost 4 years and has been responsible for many of the trading tools and training materials we use on the desk every day.  Besides being a fantastic trader, Gman has an engineering degree from Columbia and has been instrumental in helping to build out our desk and launch SMB Training.   We hope you will join us in congratulating him and wishing him success.

SMB on StockTwitsTV

Yesterday, SMB Capital’s head trader, Gman, appeared on StockTwitsTV to discuss the Market and the stocks in play for the day. Gman talked specifically about the volatility in the Market and the best way to take advantage of the trading opportunities. Watch the clip here. SMB Capital appears on StockTwitsTV every M, W, F at 2pm so be sure to tune in.

Don’t forget to follow us on Twitter.

Trade2Hold- Important Intraday Level (breaks uptrend)

Trading is not simple.  Developing traders must learn the subsets of trading set ups, and craft trading systems that account for the nuances and variables of each trade.  Each trade is different.

A spot on example of the depth needed for your playbook is a look at a Trade2Hold in V yesterday.  First as intraday traders we must adapt towards these longer holding periods because of today’s market structure.  Second we must develop a list of Trades2Hold that makes sense to us.  Third we must have well-defined exits for our Trades2Hold.  Fourth we must enter our positions based on new intraday patterns.  Finally we must use different Trades2Hold from our playbook depending on the market.  For example the Tuesday before the Senator Scott Brown election we gravitated towards buying into pullbacks for strong stocks. With the recent weakness in the market we change gears.

This is a lot of change.  But change mandated by Mother Market.

Yesterday I caught a Trade2Hold in V.  85.30 was an important intraday support level.  Sellers tested this level and the buyer would not drop.  V found 86 where it met long term resistance, previous intraday resistance, and resistance in the After Hours.  In a weak market what were the chances that V would clear 86?  ALJ who runs SMB Training Trading Tools exited his intraday long from 85.30 there, at 86.

V failed at 86 for the second time and then violated the important intraday support level of 85.30.  I shorted into the next upmove.  Before the explosion in HFT (high frequency trading). whacking the bids below 85.30 would have been my entry.  That does not work in this market.  The trader often must wait for the next upmove after the 85.30 bid is violated to start their short position.

Now that I have established my Trade2Hold I must decide how to exit.  The market was very weak so my mindset was to be slow to cover.  Something substantial needed to occur before I covered.  And finally something did.  V broke the intraday downtrend on my 5-minute chart at 83.75.  I covered, booked my profits and readied for the close.

This trade worked because I adapted to a Trade2Hold because of this market, a particular Trade2Hold that works best for a weak market, an entry that accounted for HFT’s, and an exit appropriate for yesterday and me.

Best of luck with your trading! Don’t forget to follow us on Twitter!

SMB Morning Rundown – February 5, 2010

Today, the Market appears set to open virtually unchanged. The levels we are watching in the SPY are 106.80-107(res) and 106(sup). Above 107, the next resistance level is 107.40. Below 106, the next support level is 105.50.

Our best AM Idea for today, which we highlighted in our AM Meeting is to buy AAPL on a pullback close to 192. Tgts: 194, 195

Don’t forget to follow us on Twitter!