Tuesday, September 21, 2010


Quick post on an interesting chart, CLDA

What I like about it...

  • Price has cleared a significant Volume by Price
  • Volume is constructive over the last 10 days...but more volume needs to come in to push it forward
  • It is solvent (but not profitable) and has already had a recent public offering.
  • Revenues are growing
What I don't like about it...

  • It's a biotech and subject to the vagaries of all biotechs.
  • It is not profitable, so there is a cash burn.
Charts like this in industries like this have to be allocated risk capital. (Click to make larger)

Position:  None

Monday, September 20, 2010

Notes from my life: Slopefest II and Francis Marion National Forest

Mark and I traveled down to Myrtle Beach to meet some trading friends from The Slope of Hope.  As part of my trip and my re-dedication to exercise, I spent a bit of time researching the parks down there for opportunities to mountain bike.  I found a virtual treasure trove of opportunities at the Francis Marion National Forest. Because neither of us are bike-fit (as we USED to be), we did some warming up about 3 weeks prior to our trip, and we chose a trail that would allow us to enjoy our ride without taxing us too much.  We chose the South Tibwin trail.  It was a good choice.

This trail is shaded, a feature we appreciated in the 85 degree weather.  The trails meander through a quiet wetland area.  Though we doused ourselves liberally with bug spray, anytime we stopped we were attacked by voracious mosquitoes. If you have forgotten your bug spray...get some....industrial strength.
The entre in to Fall is a cue for our spider friends to build elaborate webs.  This fellow (writing spider) not only crafted a wondrous web, but was pretty spectacular himself. While this photo (mine) might send some shivers up the spines of readers, writing spiders are non-poisonous.  Look around your outside and find some of their artwork.

As part of my research into our foray into the forest, I wanted to ensure that I understood the wildlife in that habitat.  Not only are there 5 kinds of poisonous snakes, but there are also alligators.  Yes, alligators.  I've not really thought about alligators and South Carolina as a pair. While neither of us wanted to run across a snake (though we are well-used to them in our area, I'm still frightened by them), we were hoping to see an alligator--from a safe distance.
We put the clip pedals on the bike, and put the clips on my shoes.  I've not ridden with clips on my shoes on a while.  They certainly make for more efficient pedaling.  Unfortunately I managed to lose my balance while I unclipped my left foot, but my bike fell to the right. There's not a thing one can do but go with the flow.   I have a bruised inner and outer thigh, just above the knee and an epic sized bruise on my right buttock--a deep bruise going all the way down to the bone. Not the kind of souvenir I was looking for!
Here's an on-bike camera shot of the typical trail:

Here are some of the vistas:

P9180002 P9180013 P9180020-1

We did see our alligator...a small fellow who was floating vertically in water--his head just above the water, his arms floating just below the water, and the balance of his body hanging down.  I estimate that he was 3.5-4 feet long.  I did not have a telephoto lens with me so I had to blow this up from the 'speck'. 

There was also a place on the trail--a trail covered in vegetation, that had a horizontal width of nothing but bare ground--about 8 inches or so wide.  We surmised that this must have been an animal crossing (otter, gator, beaver) of some kind where some body part (tail) consistently drug often enough to prohibit vegetation or leaf fall accumulation.

We also spent some time with our GPS (GarminGPSmap 60CSx) using some of the features that we've not used before.  My husband uses it when he goes to Hatfield & McCoy in West Virginia for dirt bike riding.  I've not used this gadget much, but I worked with it--particularly the on-line interface.  It was satisfying to understand the device's features.  There's nothing interesting about the following picture other than I could do it (and I'll likely look back at this!)


After our biking, we elected to continue south on 17 to see other areas of the park. All in all, we drove 147 miles (measured from our Myrtle Beach departure).  Thankfully, we had stopped in the Seewee Visitor's Center to purchase a park map which had all of the forest roads.  It was the best $8 dollars I had ever spent. Please be sure to visit the center, purchase some merchandise and make a donation.  I did all three!  The forest roads themselves would be just perfect for riding one's mountain bike (and the map is indispensable--like insect repellant).  As the trails crisscross these roads, one can mix up the ride.  We did see a forest worker down one of the roads. He was very friendly.  He had been bush hogging the trails  It has been very dry down there, and he was telling of a trio of cottonmouths lurking by a small bit of water (that was normally MUCH larger) that was serving as their sushi (tadpole) bar.  They slithered away as he approached....he said this to emphasize that most of the reptilian wildlife would just as soon avoid you as much as you would wish to avoid them.  Though we did not have a snake bite kit, it would be wise to bring one if you are hiking through on a long trail.  The ground was not always visible where we were riding, and one place was so obscured we decided that prudence was the better part of valor.
We will be planning a trip back, and I cannot wait.

Attending Slopefest was what made Myrtle beach our destination.  Our exploration day was long, and we were unable to get back by 5 p.m. for the happy hour just prior to dinner at the LIberty Steakhouse.  Tim Knight came by to surprise Slopers.  I knew that Tim would be attending, and I would have liked to see his arrival.  Here are a couple of pics from that.  Look at those shameless wimmin' fawning over Tim!

TK_Arrival_crop sara tk
Here's a pic of me with my Sloper friends, and one of TK and me.  I believe that the look on my face is from Tim donning his "Love Doctor" persona--dispensing advice to a fellow Sloper that I took some issue with!

Iggy_Leisa_MarvinNewTrader_Harley Leisa_TK
And here is a singular pic.

Lisa and Tropical Tim
It's great that people travel to these things.  Some come alone, some come with intrepid spouses or other family members.  But SlopeFest is about friendship and community.  It is a great way to meet fellow traders and to celebrate our connections with others.  I'm really grateful to have such great on-line friends--and going to Slopefest was a great way to nurture those important friendships.

Thursday, September 09, 2010

A couple of Chinese Lazarus Stocks: WH and CHNG

Readers know my fondness for Chinese stocks.  They can surprise and delight to the upside and and surprise and dismay to the downside.  Here are two stocks that I've mentioned in this space previously:  WH and CHNG.  Click on all images to make larger.

First, let's take a look at a chart of WH, a Chinese tubular steel manufacturer who sells to the oil and gas industry (and has been recently hit by tariffs and the mini implosion of E&P stocks).

This stock has been in a steady decline.  No, I did not have a stop loss on it. I seldom put stop losses on these speculative stocks due to the large shakeouts that occur.  Hold your admonitions. That is my decision based on my consideration of my risks (and I size my trade accordingly)...your risks can and will vary, so make your own considered judgment.  WH has had a remarkable rise on remarkable volume over these last few days--rising 50% from 09/03 through 09/08. It has pulled back in a bit.  I'm not adding, and I continue to hold my position.

Second, let's look at CHNG, a Chinese compressed natural gas concern.

CHNG was taken to the woodshed and soundly beaten for not disclosing some debt.  I figured that the stock had priced in the bad news (which to my eye and ear was more of a qualitative issue (trust) v. a quantitative issue).  I held this in two accounts.  I closed one position for a nice profit.  The stock has a 13% short interest, so that's a little bear kindling when news surprises to the upside.  There is much to be cautious about in both the fundamentals and the technicals; buying at these extended levels is risky.

On a different note, I literally stumbled across the the following chart of CBST to share.  I do not have a position. It is setting up for a volatility squeeze. This stock is fixin' to get ready to go someplace.

Saturday, September 04, 2010

Post Cards from the Edge: Market Shamanism

This post is a re-tread from my blog. I posted this originally in April, 2008. This represents a generic piece that I wrote to ground my thinking. With some much editing, I thought that it might be a nice piece to share particularly in light of Tim Knight's recent post, though I've been trying to re-edit this thing for a while. I apologize for the length. The genesis of this post was from a reader's comment about what to follow to divine stock market movement--on what basis are we to judge the direction of the market?

As market participants and technicians, we are shaman-like in our quest for determining stock market direction. Our technician's tools are our talismans: we shake, rattle and roll the various chicken bones we lovingly call our indicators; we raise our moistened finger to see which way the wind blows; and we gaze wistfully to the horizon to see whether the clouds are fair or foul. To supplement our efforts, we look thoughtfully upon the past and what the ancients said and thought. Market Shamans... a strange, but apt, metaphor I think for our attempts at market divination.

Carlos Castaneda went on a peyote-inspired walk through the desert with his eyes crossed to find "truth" somewhere in the field of his overlapping vision. Technicians employ a number of means to do the same. The complexity of the layering of divination tools (a/k/a indicators) combined with sentiment, insider buying/selling, cycles, eclipses, and Mercury retrogrades! has the capacity to produce conflicting signals leaving one standing in the desert of indecision with one's eyes permanently crossed (just as our mothers warned). Perhaps there is a chicken bone or two poking a hole in one's pocket or in a tender area (or two!). I'm not arguing against these technical talismans, but rather cautioning that at some point one saturates oneself with so much information that it is an overload and may not produce clear signals for action. Esoterica, while pleasingly seductive, can occlude our vision.

Nevertheless, that desert is one that every technician/trader must wander. And while 40 days is significant in religious texts, aspiring market technicians will need more than 40 days of quality desert time to cultivate their skills and develop their insights. Insight. Think about that word for a moment (courtesy of Dictionary.com), and I'll get back to it upon the close.


There are many systems, simple and complex, that a technician can avail her/himself to.  Oftentimes, there is a sense that the more complex and esoteric a system is, the more accurate it must be.  We expect our prophets of market direction to have access to a powerful knowledge that is not in the hands of us mere mortals.   The only esoterica worth understanding is that markets follow not so much reality but the perceptions of reality by market participants evidenced by the each day's volume and price prints. We know that there is a large disconnect between the two. If our technical tools are applied to fickle perceptions, how can we expect, much less demand, precision--both of which are voiced frequently?  Our modern tools developed for MEASURING historical market data, do not have any power for FORECASTING market direction.  It is for us to have an understanding of what the probabilities are of one direction over another.  And while there may be a 75% probability of x happening over why, there is a 100% probability that only one of them will happen.

I believe that money, like water, seeks its own level though there may be wide swaths of disparity for uncertain durations.  I believe that the following things matter a great deal:  macro economics, an understanding of intrinsic and extrinsic value in stocks, business/debt cycles, and market participant psychology as well as our own psychology. The market, as with ourselves, is trying to divine the future. It uses its own talismans, technical, fundamental, sentiment all cobbled together to form some sort of roadmap. It does not have all that great a record at forecasting or pricing accurately, but it is constantly seeking price discovery.  It is voracious in gorging on a steady diet of news--some of which gets digested easily, and some of which results in a smelly gastronomical event that defines our significant bear markets.

Our market participants are all manner of smart, experienced and successful folks: inflationistas, deflationistas, bond vigilantes, gold bugs, bulls, bears, value investors and contrarians, each believing that they have some special understanding that others simply don't get.  Realistically, they cannot all be right at the same time. Ultimately as technicians, in the purist sense, we are merely spotting the consequences of their money actions v. their espoused opinion by noting three things on which we can incontrovertibly rely: quantity and allocation over time.

Strong trends get weak and weak trends get strong depending on a number of quantitative and qualitative factors--none of which we have control over. Nevertheless, some still demand that our charts forecast the future.  When the future 'promised' by a chart set up evaporates, there is a broad lament (by those who are caught wrong-footed),  "Technical analysis has failed." It is not that technical analysis, but rather that we have failed in our understanding of its limits. But even though limited, technical analysis has a great power.  I believe that power lies in giving us a means to cultivate our market insight.

Technical analysis is the language (or music if you are more romantically inclined) of the stock market.  Justin Mamis tells us that the market is always talking to us, we merely have to understand what it is saying.  Our technical indicators--our understanding and application of them--help us tune into the market.  For any of you who have built a complex worksheet model, you understand that having to reduce something to complex to a mathematical model requires you to really understand your subject and the underlying interrelationships among the parts.  An artist 'sees' what many of us do not see.  Try to draw (or photograph) your cat or dog.  I guarantee you that you will 'see' your subject differently.  Therefore, our indicators are not predictive tools, but our venue for gaining insight.  It's through the application of our tools that we 'see' what the market or our stock are doing.  It is through our experience with this careful application, our missteps, mismanagement, and success that we build insight. While the tools (mechanics) are the same for everyone (just as a camera, hammer/chisel, paintbrush are the same for all artists), the results of their application will vary.  In other words, it is what WE bring to those tools that determines our level of success.

I used the shaman metaphor because of its ancient tradition of knowledge and insight.  A shaman is very much in tune with the world in which s/he operates and understands well the journey through the desert. That journey confers knowledge and insight (wisdom). There are no shortcuts. Ultimately we need to ensure that our own eyes are not too crossed or our talismans too many and too contradictory that we cannot see the perils in the desert.  And in most traditions, to truly see, one must first look within.

We are generally the impediment to whatever we are trying to accomplish in our lives (work, relationships, school) . Selecting our tools, understanding their use and limitations, practicing Closeup 1our techniques (disciplines) in applying those tools and evaluating our results are the foundation of building success in whatever venue we choose (artists, surgeons, market technicians, welders, brick masons).  We must remain open to possibilities that others cannot see. We must understand that our tools are what give us access to discovery.  Through discovery we build insight.  Through insight, we build mastery.