Some losses are bad, and some are not

I guess I cursed myself last night when I mentioned that I have been lucky to avoid a stock gapping lower against me. Even though I avoid earnings and other high profile news events, it is an inherent risk when you hold positions overnight, that a stock will release surprise news or get a ratings change. Thats why it is important to keep position size to a manageable level.
So SIRI gapped down on a downgrade this morning and I ended up taking a 3.55 R loss. While, I was obviously a little perturbed at the trade, it wasn't really a bad trade. Sometimes they just don't work out and it's better to not take it personally. The losses I try to avoid are losses where I had no business taking the trade or where I made an error in managing the trade.

There are many "Bad" losses including:

• Pulling a stop
• Doubling down
• Chasing a stock
• Straying from your core strategy
• Mixing Timeframes
• Overstaying your welcome in a position

I could go on and on, but the key point is that it is important to expect losses and have a plan for it. However, don't make things worse by creating extra losses by making mental mistakes.

The indices continue their trek higher and are still looking bullish on the 60 minute chart. Here are a few charts to keep an eye on.

The Andersons, Inc. (Public, NASDAQ:ANDE)
I've been waiting for ANDE to pull back to the 20 sma and it has forming an NR7 candle. It also has a little triangle forming after clearing the the recent downtrend.


Pacific Ethanol Inc (Public, NASDAQ:PEIX)
PEIX is sporting a similar chart to ANDE and looks close to a breakout. It looks like a reverse head and shoulders has been cleared and it is now in a triangle continuation pattern.


Great Wolf Resorts, Inc. (Public, NASDAQ:WOLF)
WOLF cleared this choppy base and is consolidating above the prior base. It could still pull back to 12.70, but it could just as well clear resistance with all the Casino stocks breaking out.


Best Buy Co., Inc. (Public, NYSE:BBY)
BBY continues to act weakly as it struggles with the down trendline. The 20sma is supporting it so caution remains in order, however, if the market turns sour, this will be one of the first places I turn to.


NVE Corporation (Public, NASDAQ:NVEC)
I'm getting two possible reads on NVEC here, but since this one has potential for a large move, I added it to the watchlist. It may pullback to the lower trendline, but there is still a pretty good chance that it turns here, at an internal trendline that has held recently.


NewMarket Corporation (Public, NYSE:NEU)
NEU may be in the process of breaking long term support.It broke a smaller triangle and looks like it broke out of a larger wedge and then came back up to retest resistance.

Good Luck,


DT