Trader's Almanac 2006

A very good book on market behaviour that goes through different cycles throughtout the year. Includes the effect of mid-term elections and other important patterns. Shows when the bulls and bears are in control of the market.

Looking at the jan month, I have decided to buy on tuesday and liquidate on or before friday.

Read the article on over-valued stocks on Yahoo finance. Analyzed those stocks by dropping them into my trading system. Looks like the people who read the article have bought into those stupid analyst's comments. One of the stock that I picked to trade was contrary to the anyalyst comment (I bought it instead of shorting it).

Entered into that trade around 2 pm. Risk : 84 cents per share. Bought 100 shares. Reward : This stock can go up $2 easily. The long-term trend is up. Bought the temporary pullback to the EMA. Fast oscillator showed that it was oversold. So entry is fine. Stop loss is set at 84 cents below the purchase price.

XOM has taken off, it is way above the EMA. Let's wait and see if it will pull back for another chance at buying. The news is that oil price is up and the oil stocks are moving due to that news.