Tradingsecrets take on hot and cold Aus sectors.

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spider

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Sunday, October 12, 2003 - 02:01 pm:

http://www.tradingsecrets.com.au/hot-cold-main.htm

"How long a minute is depends on what side of the bathroom door you're on."

nat

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Friday, March 03, 2006 - 10:59 am:

spider

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Friday, March 03, 2006 - 05:52 pm:

Hi nat,
in the short term, this is a link to an interview with Louise Bedford. The above link came from her web site.

spider.

http://members.optusnet.com.au/rhino00/audio/etrade.mp3

spider

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Friday, March 03, 2006 - 06:16 pm:

hi there spider ,now that time has progressed from when you wrote this post do you still find it relevent to get into those stocks that according to how a sectors performing will sway you one way or other

I need all the help I can get, so I use as many things as possible to help me to make THE decision.

I know that a lot of people discount the sectors as some of them are a little bit messy and do not accurately reflect what is happening in that area.

On the other hand some of the sectors are pretty much spot on. Why wouldn't we want to know what is happening to other shares SIMILAR to the one we want to trade?

I find this to be particularly helpful in the area of 'short' trading, which I quite enjoy.

The problem in recent times has been that the market just keeps going up.

As you have probably worked out by now, not all shares go up in an up market. So it is of particular interest to what the rest of the sector is doing.

Interestingly, if the sector is a strong one, but the share I'm looking at is doing badly, this is a strong signal to me that I could be on a winner.

Why?

Well, if you were an investor and you wanted some exposure to the retail sector would you pick CML (fig 1) which is clearly below the long MA , or would you play safe and pick WOW (fig 2) which is clearly in a strong up trend.

Over the last seven weeks, people have clearly seen CML as less attractive than WOW, there in lies my opportunity.

Both of the 'consumer' sectors have been drifting during this period. (fig3 and 4)

What conclusion would you draw?

Fig 1.

Fig 2.

Fig 3.

Fig 4.

P.S. That link is no longer active, unfortunately.

spider.

nat

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Friday, March 03, 2006 - 07:15 pm:

thanx for such a quick reply ,im currently in imformation overload i think and am trying to get back to simplicity and rewrite my plan starting with the good ole best shares in best sectors thing as if nothing else theres prob more shares then i can trade just in them so why bother with medioca sectors ,trouble is then i think the other sectors wont go down forever so should keep i on them in case they turn up ,then the best ones will become worse at some stage ,as i said to much thinking i think.I know to improve my trading ive got to start doing longer term as you do so will write a simple plan for that ,and maybe keep my shorter plan for cfds otherwise i keep changing between long and short time frames ,lack of disapline i know.With your question'what conclusion would you draw'im thinking if sector is drifting dont bother with shares in that sector ,but as to your statment between wow and cml to a trader going long in wow is the best bet ,as trend is your friend ,and cml maybe to short if market not going up ,but as for an investor is he looking for the cheaper share in the ok sector ,,,,,im a little confused ,am i some where near the mark or have i interpreted you wrong, thanx Nathan

dug

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Monday, July 31, 2006 - 11:29 am:

greetings nat,spider,
I suppose the question posed was resolved by private email?but what was your answer,spider,to which one of WOW or CML?

Nat made the text book answer-Go with the Strongest[ie WOW] but is that the 'right' trader angle?
Being a cynical contrarian type myself I would have picked the potential up'n'comer[ie CML]I would have figured on WOW retracing and CML coming back.I don't see that much difference between the two particular Companies other than a bit of Hype.
A run over their basic Stories/FA would reveal
a]CML had Myers,the poor man's DJ's,and this is[or was] the basic difference between CML and WOW.
b]A lot of promotion has gone on about the 'wonders' of WOW management specifically this Roger Corbett dude while CML has this new bloke Fletcher.

All this comes out in any paper you read.I believe in reading the paper,I don't believe all that's in it,of course but I really think you have to know what the angles being put out there on Shares,particularly Blue Chips.Supposedly this is WHY Big Money/Instos are running with them and you HAVE to follow Big Money,right?

Anyhow,with the knowledge that CML was going to ditch Myers AND that "wonder retailer" Roger Corbett was retiring I'd have got keener on CML than WOW because there was potentially more in CML's comeback/return to grace than WOW just ambling along being d'darling of d'conservative set.

I realise both of you put no store in FA.I don't go along with all that maths part of it much either but I do reckon one should know Something about an Industry and particularly your share's participation in it.In this case,well it's just Groceries hey? A walk thru the stores can give you some tips,angles,something to work with over the longer term.The fact they [WOW'n'CML]are similar size,working the same market,gives one the opportunity to back one or the other to come-back,fall from grace,Just return to a norm/MA short or long.
Ya "Rubber Band"effect,right?

Happy Trading.

ps-personally after seeing Metcash's operation in regional areas compared to WOW and CML,I reckon MTS is a GO.Read the NZ area of operation is dudding.WOW bought MTS operation in NZ,I think but don't know that for sure.Anyhow DYOR.

Dig for the sake of it.

nat

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Monday, July 31, 2006 - 02:34 pm:

hi dug ,i never did get an answer back on my take on things ,maybe i confused him with my answer ,im still not clear on things to do with his question ,but since then am clearer on my trading plan a lot better,,and your right i dont use anything other then ta,i found at start of my trading carreer i was reading everything and anything on the news and announcment events ,but found most of the time id buy a stock or look like bying a stock when i would then read something that went aginst my judement according to my chart analysis,but then would end up making a wrong decision ,as well as taking up a lot of my day reading such stuff ,,so i fixed that part of things ,just dont read about anything on stocks analysis,fixed up that part of my trading anyway.Hey dug i c you live near me maybe, welcome to c you one day for a chat on shares or whatever,Nathan

fibonacci

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Monday, July 31, 2006 - 11:27 pm:

dug,
Can't decide using FA?
Then use TA objectively i.e. a price ratio chart to interpret.

My reason to spend time on PAIRS TRADES is recent volatility e.g.

200

By choosing very similar stocks the "market", in theory at least, is "taken out of play".

Now turning to CML v. WOW.

CML

Trade noted was actually WOW long 12.00 to 15.85
CML short 8.80 to 9.35
On the basis of two 10K trades results would be...
WOW +$3207
CML -$625
Using Cfds it would also be -$40 brokerage and holding costs would only be approx. $1.10 a day.

Surprising scale of profits I thought!

Biggest problem is if you're wrong and they BOTH go against you losses obviously mount alarmingly quickly.

Sorry to diverge. back to CML v. WOW.
Your post prompted me to look at them and right now it looks like a decision is likely soon. This is the sixth time they have approached this ratio and particularly if CML rises through that level we have the answer to your ponderings.

PERHAPS.

Sitting at the back of a boat in Port Marina imbibing socially at sunset would appeal to me as a great time and place to ponder.

John

You've got to
know when to hold 'em
know when to fold 'em.

dug

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Tuesday, August 01, 2006 - 09:34 am:

Nat/Fibon,
I'm surprised nat you didn't get a Pemail perhaps telling you there is no right or wrong answer just action to back your decision.Anyway we've got Fibonacci now to help fill in some blanks.

Fibbo,the following of Consumer Staples takes out the "Market" factors because it's Staples,food,ya got to eat.How much you eat and what is the profit is some of the questions?I'm getting confused,excuse but your point,Fibonacci on Pairing Companies to avoid Market 'risk' is an interesting one and I'll ponder it

I don't use that Ratio indicator just the Comparison one like so-

Of course it's all worked out on the Time Frame.Yearly shows CML/WOW neck and neck with March triggering CML to comeback.
BUT
do it two years and it's "Off d'Field"

This perhaps reflects my rave in the earlier post re CMLvWOW in market perceptions.MD 'magnifico' etc.

Anyway,that's all I have time for at the Moment.I like the pairings idea.Currently am sticking explorers around a Producer in Materials.Got some around SMY but think I'll check into ones that aren't so much in the Wilderness.I'm thinking that the staffing/infrastructure bottle necks may get muttered about much more as "excuses" this reporting season.Anyway,I'm rambling bordering incoherent.
Haven't had even my Coffee yet!!
cheers,
jr

Dig for the sake of it.

dug

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Tuesday, August 01, 2006 - 11:41 am:

On the topic of Grouping.

NAV and THX are exploring for Sally Malay[SMY].They're putting out some of their cash searching out specific ore bodies that if get "Proved" like JORC wise,then SMY comes in and develops them,blah etc.

The interesting thing?
NAV is taking off while THX is forgotten.
Is this FA as in THX is digging in an inferior spot?
or could it be that we are just looking at a technical flaw ie failure of attention span?

Happy Trading.

Dig for the sake of it.

spider

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Tuesday, August 01, 2006 - 02:34 pm:

Hi nat,
I didn't answer the question that you posed at the end of your post because you said "im currently in imformation overload i think and am trying to get back to simplicity and rewrite my plan"

It seemed like a good idea to leave you alone, and let you make up your own mind, which you did.
Decisions that come from your own experience are more powerful than answers that are handed to you by someone who may have had different experiences.

I'm more than happy to make suggestions and to ask questions (as I did in that post) that might lead you to some interesting answers, that will mean more to you than my opinion.
Does that make sense to you?

Hi dug,
I found some of your observations very interesting:
"Nat made the text book answer-Go with the Strongest[ie WOW] but is that the 'right' trader angle?
Being a cynical contrarian type myself I would have picked the potential up'n'comer[ie CML]I would have figured on WOW retracing and CML coming back.I don't see that much difference between the two particular Companies other than a bit of Hype."

I believe that your comment here proves my point.
My opinion on which share to choose would be coloured by my distaste for FA, so my opinion would be worthless to someone who, like yourself, makes their trading decisions by mixing the two disciplines (more power to you btw).

"Nat/Fibon,
I'm surprised nat you didn't get a Pemail perhaps telling you there is no right or wrong answer just action to back your decision."

I really like your statement here.
As I said above, it all depends on who is doing the analysis, and how close they are to your way of thinking. (btw, what is a Pmail?)

Regards, spider.

nat

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Tuesday, August 01, 2006 - 04:58 pm:

hi there spider,i thought you mustve had a reason for not replying the second time ,and yes im a lot more clear in my plan about trading,its amazing the twists and turns one goes through to finally get ones own trading style that suits .I think Pmail is 'private email'
Hey dug a simple reason for me to choose between nav and thx ,,nav is above 200 day ema and thx is below ,thats all i need to know ,bit boring hey .
Nathan

dug

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