Monday, July 18
Blogging May Be Light This Week
I'm switching to a different internet connection this week, so blogging may be light. Thanks for your patience.
I'm up to speed in record time. Facts people may be interested in: one-time cost to set up an ADSL connection in Beijing: RMB198 ($23.94) including cable modem; monthly cost to maintain connection: RMB100 ($12.09). Not cheap for a local Beijinger, but both Uncle Morty and I approve of the prices.
Posted on July 18, 2005 at 8:00, GMT
Chat Transcript for Sunday, July 17, 2005
Thanks to everyone who participated in this week's "Focus on the Homebuilders" chat. Here's the transcript for those who couldn't make it:
Posted on July 18, 2005 at 7:00, GMT
| Spock | Howdy all |
| Ugly | hi everyone |
| edge | Hi y'll |
| Spock | where's our chairman? |
| scoot | hi guys |
| CMaoxian | I'm here, never fear |
| Hans | Hello everybody |
| BigRed | howdy all |
| CMaoxian | hi red |
| edge | I'm new, just discovered this site from Traders Mike. |
| Ugly | I have a big bowl of pork rinds, I am ready |
| CMaoxian | welcome edge |
| CMaoxian | ugly did you add my pork rind fact to the database? |
| Ugly | yeah, it's in there |
| edge | Permit me if you may, what is the outlook of the $compq .. it is overbought and still looks strong though |
| CMaoxian | i never look at the comp, i only look at the NDX |
| edge | if I may ask what is the NDX |
| CMaoxian | the Nasdaq 100 index |
| Spock | Look at VXN, all time low, it has NO FEAR... |
| edge | Quadr Q , ok |
| CMaoxian | i noted the VIX, spock, thanks |
| CMaoxian | it has been low for a good long time |
| CMaoxian | but this new spike down, i noted it |
| edge | Cmao, the same trend exist with the ndx now |
| CMaoxian | yes edge, maybe the QQQQ will get to 39.50 |
| Spock | Can Mao or anyone here recommend a good scanner? |
| CMaoxian | the Q's actually had an idiot wave buy set-up above 37 |
| CMaoxian | hi chas |
| Spock | i was looking for something to scan intraday charts |
| Spock | something like volume for this 15 min bar is > 10x average volume of last 130 bars |
| CMaoxian | Spock, RealTick's HotTrend is very nice |
| CMaoxian | though it's not configurable |
| edge | it looks as if it might get to it in the first hour of the market tommorrow or just gap up to it--- from my crystal analysis |
| CMaoxian | yes edge, and my crystal ball says it may stall there for a tad if it does |
| CMaoxian | anyway, i'm gonna yack about the homebuilders now |
| Spock | So Mao, can RealTick achieve the above scenario |
| CMaoxian | no spock |
| edge | I agree with you, it is getting to its top based on my 10day |
| CMaoxian | you'd need something that you can configure |
| Spock | i know most of the scanners will only search within a list of, say 200 stocks you specified |
| edge | ok |
| Spock | and i want to search the universe ;-) |
| CMaoxian | let's start with Toll Brothers: |
| CMaoxian |  |
| CMaoxian | TOL recently split again |
| CMaoxian | prolly earn $5 a share next year |
| CMaoxian | backlog out the wazoo |
| edge | not done yet and very very strong, better to get it when it retraces to its 10D |
| CMaoxian | if you look at the homebuilders' margins of late, they've just exploded... these guys have great pricing power now |
| edge | I mean 55 and change |
| CMaoxian | what's driving these high-end home builders? |
| CMaoxian | one fact you may not know is that households earning over 100 grand are growing six times faster than the national average |
| CMaoxian | anyone have any experience buying a TOL home? |
| CMaoxian | at the end of June, a 30 year fixed home loan was at 5.53% |
| Spock | and Alan said it's a conundrum ;-) |
| CMaoxian | low borrowing costs mean folks can buy these McMansions |
| CMaoxian | next chart, Standard Pacific: |
| CMaoxian |  |
| CMaoxian | these guys will prolly earn $12.40 a share next year |
| CMaoxian | net margins better than 10% ... think pricing power |
| CMaoxian | what charts are useful for is to ask, does this thing look like it's topping? |
| CMaoxian | hi Mu |
| Mu | Hi :-) |
| CMaoxian | these are all monthly charts by the way |
| Mu | just have a minute - just stopped in quickly to see what's up |
| CMaoxian | next chart: Ryland |
| CMaoxian |  |
| Mu | what are you all talking about? |
| CMaoxian | the homebuilders are up, Mu |
| Mu | k thx |
| Mu | Forgot to turn off the popup blocker :-) |
| CMaoxian | prolly earn over $9 a share next year, and like all the others, their margins are expanding |
| CMaoxian | next chart: Pulte |
| CMaoxian |  |
| CMaoxian | PHM will prolly earn around $11 a share next year |
| Mu | I'll be back next week maybe - looks good - thanks for sharing - good trading to you all this week |
| 6thworld | good evening all |
| 6thworld | damn is everyone wrapping up? |
| CMaoxian | next is KB Home: |
| CMaoxian |  |
| Spock | we barely started 6th |
| CMaoxian | KBH too may earn around $11 a share next year |
| CMaoxian | these guys have almost no unsold homes in stock |
| CMaoxian | you can see really tight inventory for new homes across the board |
| 6thworld | looks like an extended wave 5 idiot wave |
| CMaoxian | yes, wave 7 ;-) |
| CMaoxian | next chart: Hovnanian |
| CMaoxian |  |
| CMaoxian | a nice Armenian name |
| 6thworld | yeah the homebuilders run a lean ship |
| edge | all this homebuilder are still going up -- too expensive but safe, in terms of risk |
| CMaoxian | these guys are big in the Jersey suburbs as 6thworld no doubt knows |
| 6thworld | all over da place |
| CMaoxian | yes, including Poland |
| edge | same trend, absolutely astonishing technically |
| chud | fuzzy's been long since 2000 i presume? |
| CMaoxian | everyone talks about the "housing bubble" but it's just simple supply/demand: low rates + limited housing supply = high prices |
| 6thworld | plus a vacation home is a nice place to park your stock gains |
| CMaoxian | last chart: Beazer Homes |
| CMaoxian |  |
| 6thworld | did you do TOL? |
| CMaoxian | yes, 6th |
| CMaoxian | BZH will prolly earn over $8 a share next year |
| CMaoxian | so when you think homebuilders you usually think "cyclical" but the conundrum (thanks Spock) of low rates has changed things |
| edge | same trend, cmao does it look as if we still have like 2wks minimum "guess" to the end of this homebuilders tren |
| CMaoxian | you borrow 400K at 5.53% your monthly payment is only $2275 (?) -- i'm doing it on the back of an envelope |
| 6thworld | about right |
| CMaoxian | yes edge, the charts don't look the least bit "toppish" yet and until they do you should chuckle about all "housing bubble" talk |
| CMaoxian | borrow 700K and pay what, $4,000 a month? |
| CMaoxian | what professional DINK couple can't afford that? |
| 6thworld | then you add in $13k for taxes |
| 6thworld | furnish the house with new stuff |
| CMaoxian | 20K in Princeton |
| 6thworld | yeah i know |
| 6thworld | then i wait for you to show up on my foreclosure list, lol |
| CMaoxian | why furnish when you can live out of your van in the garage? |
| 6thworld | you're married, would that fly with your wife? |
| 6thworld | not mine, lol |
| CMaoxian | alas, no |
| CMaoxian | OK guys i'm finished featuring charts, you got anything you want to yack about, day trades of note for instance? |
| 6thworld | guys are different, i lived with a towel pinned over my condo window for 6 months |
| CMaoxian | hi ks |
| 6thworld | i dunno the maoxian weekly list of ETF's is working out nicely for me |
| CMaoxian | gratuitous plug, lol |
| ks | hello, how are you guys/gals? |
| 6thworld | but i'm in that long term investor space |
| CMaoxian | this week's spreadsheet will be a tad late |
| 6thworld | its ok, i'm demoralized after getting kicked out of Ugly's contest, i wont notice |
| edge | cmao, what is the best time to get out of a swing trade |
| CMaoxian | i don't swing, edge |
| 6thworld | edge: when you make money or before you lose too much |
| edge | value investor?? |
| CMaoxian | yeah, i like to day trade or invest for the long haul, nothing in between |
| edge | what is the best entry and exist for you techically |
| Spock | Mao: so i assume you're doing both now? |
| edge | cmao, technically speaking |
| CMaoxian | Spock, I am not day trading at the moment |
| CMaoxian | hi DraX |
| Spock | so you're an investor? |
| CMaoxian | yes, i am a buy and hope investor |
| Spock | ;-) |
| DraXon | hi guys, i'm multi-tasking here |
| CMaoxian | edge i explained my entry and exit methods in the Dummy Lessons |
| DraXon | playing poker and chatting |
| DraXon | hope you don't mind |
| CMaoxian | yes chud, the Fuzz got long in 2000 and hasn't seen a down bar yet (on the monthlies) |
| edge | I remember now, exit towards lunch time when prices are settling down. I forgot cmao |
| CMaoxian | no, exit end of day |
| Spock | Mao: if you day trade and you invest for the long haul, you're at 2 extremes here |
| Spock | technical vs fundamental |
| CMaoxian | yes Spock, i'm aware of that |
| CMaoxian | i'm comfortable at both extremes |
| DraXon | seven-eleven sure looks good, it's trending nicely |
| CMaoxian | i find that folks aren't clear about their goals when they get into stuff and that's where the trouble lies |
| DraXon | SE is the symbol |
| CMaoxian | they confuse trading with investing, and that's deadly |
| DraXon | totally different styles |
| Spock | agree... if the trade doesn't go well, they will become investors |
| edge | what is the recommended stop loss by you when day trading?? |
| edge | you right spocks |
| CMaoxian | i like to stop below the swing that preceded entry or at the low of the entry bar itself |
| DraXon | MGM also looks nice too |
| DraXon | i didn't realize that they owned so many hotels on the vegas strip |
| CMaoxian | yes SE is going up nicely, and i just saw one here (in Beijing) yesterday |
| DraXon | poker craze must play a nice part in their business |
| CMaoxian | MGM basically owns all of Vegas now |
| DraXon | tell me about it! |
| DraXon | i really like HANS as well |
| CMaoxian | poker is a pretty crummy biz actually, but maybe the players will drop by the craps table on the way out |
| CMaoxian | or even better, the slots |
| CMaoxian | hi stink |
| CMaoxian | ask Ugly about HANS |
| DraXon | such a beautiful trending stock |
| DraXon | picture perfect |
| edge | missed HANS regretfully |
| DraXon | and it looks like the homebuilders are going gangbusters |
| Spock | Mao: i think that's Justin K |
| CMaoxian | keep your eyes squarely on the new highs list and you won't be able to miss something like HANS (cuz it's there every day) |
| CMaoxian | thx for the pointer, spock |
| CMaoxian | if there's only one thing you wanna focus on, it should be the new highs list |
| edge | when it tops I can assure you it will reach it's 50day on weekly chart |
| edge | why focus on the new high list cmao |
| DraXon | tol, ryl, joe, mth, spf are all trending nicely |
| CMaoxian | so you know what's strong, edge |
| edge | ok |
| edge | do you short cmao |
| CMaoxian | DraX we just talked about the homebuilders for the last hour, i guess you weren't here |
| DraXon | sorry |
| edge | sorry, you are an investor and day |
| CMaoxian | yes, edge |
| CMaoxian | i actually like the short side better while day trading |
| edge | ok |
| Spock | is there a reason for that Mao? |
| DraXon | i'm having too much fun looking at all these trending stocks |
| Spock | because i like the opposite |
| CMaoxian | i guess because when things go splat and i'm short it feels nice, spock |
| edge | companies with no fundamentals, just news |
| DraXon | so much that i'm finding it hard to decide which ones to trade |
| DraXon | if i had to pick one, i'd probably go for HANS |
| edge | stocks actually drops quickly than go up, it might take a stock 4 weeks to go up, but 2 weeks to get to its base or below again |
| CMaoxian | you have to be equally adept at both the short and long side as a day trader |
| edge | whats you take on my recent post cmao |
| Spock | I usually buy a day trade position, close up some, and let it the rest ride if the chart's good |
| CMaoxian | i never think in terms of weeks-long trades, edge |
| CMaoxian | do you move your stop to breakeven when you do that, spock? |
| Spock | yes, always |
| CMaoxian | yeah, that's good then |
| Spock | and trail it up |
| CMaoxian | mental health insurance |
| DraXon | the thing with day trading is that slippage/commissions plays a big factor in eating up your profits |
| CMaoxian | i was never much good at trailing stops |
| edge | never used it |
| Spock | it's tricky biz Mao |
| CMaoxian | slippage is not a problem if you're playing liquid stuff, DraX |
| Spock | but i think the risk / reward is worth it |
| CMaoxian | yes spock, and each time you have to make a decision it costs a little more mental effort |
| CMaoxian | i think you should minimize your decision making because that will help preserve your mental state |
| CMaoxian | monkeying constantly with stops i found fatiguing and ultimately counterproductive |
| CMaoxian | but that's me |
| CMaoxian | everyone's different |
| Spock | my pain is deciding whether to re-enter after getting whipsawed out |
| CMaoxian | yes, again that's mental effort |
| Spock | but i don't mind spending more time to look into trailing stops |
| DraXon | just treat each signal as a separate transaction |
| CMaoxian | anyone have any recent trades of note that i can review, i have time for one i guess |
| DraXon | it's challenging though that's for sure |
| Spock | yes Drax |
| edge | what do you think about kosn |
| DraXon | kosn, not too crazy about the prospects |
| DraXon | it just shot up didn't it? |
| CMaoxian | if you can give me your exact entry and exit it's easy for me to review |
| justink | do you guys daytrade or swing trade? |
| CMaoxian | is it justin k or ju stink? |
| justink | justin k |
| CMaoxian | with the j pronounced like a y? |
| CMaoxian | day trade, justin |
| CMaoxian | scoot, you have a trade to review? |
| DraXon | mao, do you have a rich wife? |
| scoot | i'm on vacation |
| CMaoxian | several, DraX |
| DraXon | you seem to be moving all over the world |
| CMaoxian | yes, well i'm an international man of intrigue |
| DraXon | must be exciting |
| CMaoxian | Ugly, any trades of note? |
| CMaoxian | it broadens the mind, DraX |
| DraXon | i'd like to have your lifestyle |
| DraXon | blogging must be paying you a lot |
| CMaoxian | since i stopped the AdSense ads i don't even make 87 cents a day anymore |
| DraXon | yeah right, you were probably making 100x that |
| Spock | so when will u start day trade again? |
| CMaoxian | chud, any trades of note? |
| CMaoxian | prolly at the end of this year, spock |
| CMaoxian | no DraX, i made about 87 cents a day, seriously |
| Spock | because of baby? |
| CMaoxian | i have 12 regular readers |
| CMaoxian | i just have to settle in and settle down, spock |
| DraXon | frgo looks good |
| CMaoxian | if i made $87 a day from AdSense that would be pretty remarkable |
| Spock | it's not too bad in Beijing |
| CMaoxian | OK, if y'all don't have any trades to review, I guess I'll pack it in |
| CMaoxian | yes, you could live very well (kind of) on $87 a day here |
| DraXon | i'd be very happy |
| scoot | ok see you cm. thanks. |
| DraXon | just post some trades |
| Spock | thanks Mao |
| CMaoxian | it depends on how you're used to living |
| DraXon | and some articles |
| DraXon | not a bad living |
| Spock | gotta go |
| 6thworld | laterz |
| CMaoxian | thanks for coming by, spock |
| DraXon | are you saying that blogging is not a good way of making a living? |
| DraXon | damn, there goes one of my dreams |
| CMaoxian | Blogging is a terrible way to make a living ;-) |
| DraXon | you just want less competition |
| DraXon | hehe |
| DraXon | is there a way to make a living giving trade recommendations? |
| CMaoxian | you'd need a massive audience to make a living by blogging |
| CMaoxian | OK, thanks to everyone for coming by |
| justink | DraXon - you have to be extremely accurate, and it takes a long time to build up a large enough userbase |
| CMaoxian | see you next time - bye |
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