Meanwhile, these were Jay's calls Tuesday (the targets are just guidelines, many traders took more and less, timing is respective to the individual trader):

THIS PAGE UPDATES THROUGHOUT THE DAY, MAKE SURE TO REFRESH DURING MARKET AND POST MARKET HOURS.

Intraday Trades -
__________________________________________

Current swings:

Only available to members of UndergroundSwingTrades.com

9/02 - BUY LLNW 4, PARED 4.47, out + .47


Intraday trades:

9:33 - BUY RIMM 44.17, SOLD 44.35, out + .18
10:00 - BUY RIMM 44.03, PARED 44.17, out + .14, PARED 44.26, out + .23, SOLD 44.53, out + .50
10:21 - SHORT ORCL 24.25, COVERED 24.20, out + .05
10:39 - BUY RIMM 44.48, STOPPED 44.33, out - .15
11:05 - SHORT ORCL 24.20, PARED 24.10, out + .20, COVERED 24.03, out + .17
3:30 - BUY RIMM 44.48, STOPPED 44.40, out - .08
3:39 - BUY RIMM 44.47, STOPPED 44.37, out - .10
3:50 - SHORT SPY 109.77, COVERED 109.60, out + .17


** FINALLY SHIPPING!! --- the third and FINAL BOOK in the Undergroundtrader trilogy, "Trading Full Circle", by Jea Yu and DVD "Short Term Profit Hunter". This book is a decade in the making and finally set to release April 2010. Click here to before they sell out! http://www.undergroundtrader.com/handbook.html

Intraday Narrative:

SPY got an exhaustion slip into the open. We hit RIMM nicely off the daily 5 similar to the SNDK daily mini pup action this morning for nice scalps. RIMM failed a 5/15 min dual mini pup on light volume. ORCL over bought and hit shorts into deadzone on the 5/15 min inv pups as daily upper bbs beckon. ORCL slowly selling off with the 15 min mini inv pup trimmed out some more at the daily upper bbs. Market chopped all through deadzone going nowhere on light volume. We got stupid chopped on RIMM but hit SPY end of day for a perfect storm lean to scalp out. Very light volume day.



------------
Jay's Notes for Sept 6th-10th, 2010

Hi Gang,

The bulls pulled off a major rope of dope move last week after Monday’s convincing pure trending selloff to suck in more shorts only to have they squeezed mercilessly the rest of the week to close near the weekly highs. The SPY daily 200 period ma sits at 111.79 which is the next upside major resistance. The weekly 15 period ma sits at 110.19 and then most clustered support overlap area sits at that 108.60 x .30 level which is BOTH the weekly/monthly 15 period moving averages. The daily 200 period ma would be the first exhaustion short area to keep an eye on 111.70 x 112 level. If 112 cracks, then the daily upper bbs at the 112.70 level would be the next upside target. This would be a very extreme move to the upside and would be a solid pot for shorts. I stress to make sure that the charts SUPPORT the SHORTS first! Either with 60/15 minute shooting stars under the upper bollinger bands with mini inverse pups OR 80 band stochastics slips with mini inverse pups. This is very important as everyone and their cousin will be looking for profit taking and this could lead to more squeezing. Some exhaustion pullbacks are in the cards this week, the question is early or latter part of the week. In the meantime, watch for laggards that have yet to bounce with the overall market and their respective sectors, some of which will be listed in the Stocks to Watch area below.

Please NOTE that swing trades are not part of a premium service at www.undergroundswingtrades.com. They will not be given in the Trading Pit chatroom moving forward. This service caters to those who want to reap the rewards of the tools without having to spend the time and energy to track market movements intra day. As a courtesy, one swing trade was given last week which was a sympathy trade to AKAM. This stock was LLNW at $4 for a breakout move with a $5-7 target level and more if AKAM happens to get acquired. So far it’s up 12%. More to come, but ONLY through the new service which provide the analysis, the entry, multiple targets, stops and ALLOCATION emailed directly to subscribers as soon as they trigger. Nuff said!


<> Stocks to Watch <> : A lot of these are contingent on the SPY. If SPY forms daily mini inv pups, then scratch the longs. To be safe, make sure that the 60 min stochastics peaks out before taking short positions and short the RETEST FAILURES of the short area bumpers listed. DO NOT SHORT RIGHT INTO THE FIRST TEST if the 60 min is in a mini pup grind up. Get the 15/5 min to slip and 60 min to STALL at least on the stochastics and then position with a good 1 min stochs reversal down. Remember all stocks are anchored by the action of the SPY (or noodles) and contingent on the SPY movement unless there is a strong fade effect in place. This list is composed of prior weekly/monthly mini pup perfect storms that were the strongest stocks on the way up, now seeing laggard selling on the way down.

AMZN SHORT EXHAUSTION – AMZN has had a hell of a short squeeze in the past week. An exhaustion short (preferably on a gap up) near the 60 min upper bbs and more importantly, the weekly upper bbs which sit at 140.58, would be ideal in the 140.35 x 140.75 area with STOP LOSS TRAIL at 142.10. This was the prior resistance level before its huge plunge down to the low 100s. Targets on the exhaustion sit at the 138.50 x 138.70 and best case 135.50 x 134.50 area.

RIMM LONG – This filthy pig has been a nasty laggard throughout the whole market bounce. The daily 5 period ma support sits at 44.30 and the 15 period ma target sits at 47.19. LONGS on pullbacks to the 44.40 x 44.20 area is ideal with a trail on 43.90 breaks or LONGS on 45.10 breaks with a 44.60 trail stop works. This one has been trying to steadily rise on the 60 min 15 period ma support. Don’t fight the 15/5 minute stochastics if they are coming down, wait for them to turn back up again first.

INTU LONG on PULLBACKS – This one has a daily pup and mini pup. Pullbacks to the 43.70s x 43.40s for a daily upper bbs target of 45.50 or long on 44.15 trigger which is + .20 above the weekly upper bbs with a trail stop at 43.65 for same target.

SNDK PULLBACK LONGS - SNDK is still a laggard as its daily 15 sits at 38.52. A pullback to the daily 200 period ma range at 36 x 35.70 would be ideal to step back into this one. The best pullback would be that daily 5 period ma at 35.05 area as we have seen how powerful a test there can be. This would be a two entry/add play with a secondary add on pullbacks to the 35.30 x 35 area for upside target back to 38s.


-*- Swing Trades -*- : These are Swing/Portfolio past trades that will ONLY BE AVAILABLE TO SWINGTRADE SUBSCRIBERS at http://www.undergroundswingtrades.com/ . This is a premium highly targeted and filtered service catering to investors who do not have the time to watch minute-to-minute market movement every day.

Chatroom members only receive intraday alerts. The swings will be composed of longer term core swings (weeks to months), 2-5 days swings and situation trades (weeks to months).


Current: These trades are only available to subscribers of http://www.undergroundswingtrades.com/

9/2 – BUY LLNW 4, pared 4.47, out + .47, target 5-7

Closed Trades:

7/20 - SHORT GS 149.35, overnight on core swing shares from 141.35, (to avg 145.35 on original core shares), PARED 148.05, out + 1.30, PARED 147, out + 2.35, STOPPED out - 1.65
7/07 - BUY TIBX 12.23, 07/08- PARED 12.80, out + .57, 7/13- PARED 13.05, out + .82, 07/14 - PARED 13.30, out + 1.07, 7/23 - PARED 13.90, out + 1.67, 7/27 - SOLD 14.23, out + 2
7/07 - BUY SNDK 43.15, PARED 43.45, out + .30, SOLD 43.60, out + .45, overnight SOLD 44.25, out + 1.10
6/14 - BUY BBI .18add, pared 22, out + .04, PARED .27, out + .09, 6/16- pared .29, out + .11
6/1 - BUY SPY JUNE 109 PUTS at 3.10, PARED 3.85, out + .75, SOLD 4, out + .90
6/1 - SHORT SPY 108.84, PARED 107.84, out + 1, COVERED 107.50, out + 1.34
6/1 - SHORT SPY 109.20add, PARED 107.70, out + 1.70, STOPPED 110.10, out - .90
6/1 - SHORT SPY 109.68add, PARED 107.68, out + 2, 6/2- STOPPED 110.10, out - .42
6/1 - BUY SPY JUNE 109 PUTSadd at 2.75, PARED 3.45, out + .70, PARED 3.75, out + 1, 6/2- STOPPED 2.30, out - .45

5/27 - BUY SPY 110.45, 5/28 - pared 110.85, out + .40, SOLD 110.54, out + .10
5/12 - BUY VHC 5.52, PARED 6.39, out + .87, 5/17- SOLD 7.55, out + 2.03 (+36%)
4/30 - BUY SPY JUNE 120 PUTS 3.45, PARED 4, out + .55, 5/4 - PARED 4.70, out + 1.25, PARED 5.15, out + 1.70, 5/5 - PARED 5.90, out + 2.45, SOLD 6.30, out + 2.85 (80% gain)
4/30 - SHORT SPY 119.62, PARED 119.22, out + .40, swing, 5/4 - PARED 117.80, out + 1.82, PARED 117.30, out + 2.32, 5/5 - COVERED 116.20, out + 3.42
4/29 - BUY POT 110.30, PARED 110.85, out + .55, 4/30- SOLD 112.30, out + 2
4/29 - BUY POT 110.01add, PARED 110.26, out + .25, PARED 110.85, out + .84, ,4/30- SOLD 112.30, out + 2.29


<> PORTFOLIO WISH LIST <> : This is a running list of accumulation swings for longer term situation trades. These will be added to the current swing trades if triggered for UndergroundSwingTrade.com members only.

AKAM 30-33 accumulation. Lead content delivery network.
** for undergroundswingtrades.com members, we have a very special sympathy laggard play on AKAM released this week!

CSCO 19-17 accumulation. Pure internet bandwidth play.

LDK 6.60 x 6 accumulation.

VHC accumulation long only on pullbacks: We had a great swing on this one. I am looking to accumulate on pullbacks lower this time to the 6.50 x 7 level and accumulate in .50 increments to 3.50.

DTV accumulation long only on pullbacks: This sucker has been strong. Any dumpage to the 30s would be great area to accumulate in 1.5 pt increments to 27 area.

TIBX accumulation swing long only on pullbacks: I am looking for an accumulation position 14.20 x 13.80 range, accumulate in .50 increments.

LAVA accumulation swing long only on pullbacks: LAVA on pullbacks to the 2.50 area to 2 area accumulate in .25 increments is a great swing long.

Econ Reports This Week:
Sep 08 10:30 Crude Inventories 09/04
NA NA 3.42M
Sep 08 14:00 Fed's Beige Book Sep
NA NA NA
Sep 08 15:00 Consumer Credit Jul
-$5.5B -$5.25B -$1.3B
Sep 09 08:30 Initial Claims 09/04
475K 470K 472K
Sep 09 08:30 Continuing Claims 08/28
4450K 4445K 4456K
Sep 09 08:30 Trade Balance Jul
-$46.5B -$47.2B -$49.9B
Sep 10 10:00 Wholesale Inventories Jul

Earnings Reports This Week:
Tues: premarket: CASY: postmarket: NAV, PBY
Wed: postmarket: NSM, SWHC
Thurs: postmarket: LULU

Ok gang, volume should be coming back into the markets this week. Make sure you get multiple confirmations before shorting exhaustions and or trend reversals and don’t hesitate to take stops! Give the open 10 mins after the opening bell to get a better picture before your first trade.


Cya in the Pit!

J

Ok gang, check out my latest interview http://www.traderinterviews.com/links/JeaYu and also latest DVD is out called Short Term Profit Hunter which can be purchased at http://www.undergroundtrader.com/handbook.html
and also the my latest interview with Tim Burquoin is up on the Free Articles page at http://www.undergroundtrader.com/freetradingmaterials/


-- Special Announcement ---

It can be confusing as to what steps to take to further proceed with learning the methods at UndergroundTrader.com. I have outlined the options for you to proceed based on time, costs, experience and desire to learn.

If you purchased my book Trading Full Circle and DVD Short Tern Profit Hunter http://www.invest-store.com/undergroundtrader/item.php?8006857
It’s a good idea to read through and get the concept of mini pups down. The methods all revolve around that simple pattern set up on the stochastics.

Here is a link for some more free articles and interview videos you might find useful http://www.undergroundtrader.com/freetradingmaterials/

This is a link to the daily chalkboard, which updates one of our alerts and outlines the chart setup http://www.undergroundtrader.com/graphics/jay/ along with the intraday alerts given in real-time in the chatroom http://www.undergroundtrader.com/jay/

You can take a free 5 day trial to the live trading chatroom http://www.undergroundtrader.com/freetrial/
This will allow you to see real time alerts and analysis by Jea Yu every trading day. The methods take life in real time as alerts are called with instructions for exits. This trial version allows you to see and read the chatroom and daily logs. You won’t have access to speak or the training library.

If you like the style of trading and the results, then you can opt to move onto the next level of commitment. This is where you have to decide how much time, costs and effort you want to put into this.

1) You can apply for Full Membership which is $250/month. This gives full access and speaking privileges in the chatroom, which allows for real time text interaction with Jea and the other traders. Jea will answer any questions and everything is logged. You also get access to our trader training section which is a self-directed link to over 3,000 pages of online seminars, presentations, chalkboards and chart set-ups in addition to over 7 years of archived logs. The self directed trader will have all the material they need to grasp the methods in this section.

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3) Mentorship Training http://www.undergroundtrader.com/mentorship/ . This is the highest level training available as you will train one on one with Jea Yu in his office in Maryland. All the research routines, set ups, preparation and trade management will be taught specifically calibrated to the trainees skill level. This include 90 days of chatroom access as well as 8 weekly phone consults to monitor progress and full phone access to Jea during the market trading day. This costs $5,000/prepaid at least 30 days ahead of training. The mentorship training is the highest level of immersion to accelerate your learning. Beginners to advanced traders can opt for this, as it will literally shed a year off your learning curve. These are limited sessions and scheduling ahead of time is crucial.

4) If you don't have the time or inclination to learn the methods and or sit in front of the computer every day monitoring setups, but want to take part in the gains, then consider http://www.undergroundswingtrades.com/ This service is a premium swing/portfolio trade service where all the filtering has been done and instructions are sent via email to consider for swing trades.


For options 2 and 3, just drop an email to jay@undergroundtrader.com. For option 4, go to www.undergroundswingtrades.com for details on membership.

Also, I have switched all charting over to CobraIQ platform utilizing the 1,5,15,60,daily,weekly,monthly full pre/post market data feed. This is the best way to go and takes advantage of the full SCOPE of data available. All the data has been re-templated onto a single screen! www.cobratrading.com has the template available for UndergroundTrader.com members, ask Brandon or Chad about attaining them, or opening up an account to receive them!

----

** Contact cobratrading.com 1-877-797-6272 to set up. This is a limited time offer! * As an incentive for members of Underground Traders, Cobra Trading is willing to offer a special commission rate of $0.005 per share + ECN rebates on their CobraIQ platform. This is the same platform moderators of Underground use throughout the day. Also, www.cobratrading.com is offering a free test drive of their CobraIQ platform for Undergroundtrader.com members and referrals. Try out the rifle charts for yourself. Ask for Chad about this promotion."***

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Use this link to ORDER before they sell out! http://www.invest-store.com/undergroundtrader/item.php?8006857

* If you are interested in a leveraged intraday trading account with $5k minimum setup and free software, zap me an email jay@undergroundtrader.com.

*** Jea Yu is available for speaking engagements through
the world renowned International Speakers Bureau, click link for details
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*** Cobra Trading now offers futures trading in addition to our equity and options business. As the featured broker for Underground Trader we want to offer you the opportunity to get in first! Trade the S&P E-mini's and more on any of the following platforms:

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If you have any questions please do not hesitate to contact Brandon Kaisler at 877-792-6272 or via email at bk@cobratrading.com. Also, let me know what it takes to earn your trading business, futures, equities, and/or options! Whether it is a different platform, competitive commissions, or anything else that comes to mind and I will do everything in my power to make it happen.

As an incentive for members of Underground Traders, Cobra Trading is willing to offer a special commission rate of $0.005 per share + ECN rebates on their CobraIQ platform with customized UndergroundTrader Template with all necessary charts constructed. This is the same platform moderators of Underground use throughout the day.

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Sep 08 10:30 Crude Inventories 09/04
NA NA 3.42M
Sep 08 14:00 Fed's Beige Book Sep
NA NA NA
Sep 08 15:00 Consumer Credit Jul
-$5.5B -$5.25B -$1.3B
Sep 09 08:30 Initial Claims 09/04
475K 470K 472K
Sep 09 08:30 Continuing Claims 08/28
4450K 4445K 4456K
Sep 09 08:30 Trade Balance Jul
-$46.5B -$47.2B -$49.9B
Sep 10 10:00 Wholesale Inventories Jul


--- this is just a recap of How to Play Earnings Gapper/Dumpers ---

PLAYING EARNINGS GAPPERS/DUMPERS THE NEXT MORNING-

First of all, research is needed ahead of time. You will need to pull up the daily/weekly/monthly charts and note any OVERLAPPING moving averages (5/15/50/200 period simple moving averages and bollinger bands and jot those down- just the OVERLAPPING LEVELS). Also, note if there is an existing mini pup on the daily/weekly/monthly stochastics. If so, then jot down the 5 period ma, as that is the important level on mini pups.

Once you have this information, then watch the PREMARKET from 8am est on. You need to have premarket charting, cobratrading.com is the one I use and has been the most reliable.

Premarket:

1) Watch to see if the stock is trading anywhere NEAR or AT those overlapping support/resistance levels in the premarket (5/1 min chart with stochastics 5/15/20 period ma's and BBs is all you need).

2) Filter on 5 minute trends with mini pups in place. The 5 min 5 period ma MUST have held at least 3 pullback attempts and sloping + a mini pup.

3) Trigger entry on 1 minute stochastics mini pups off the 5 min 5 period ma's and target the 1/5 min bbs (the 1 min will usually be closer).

4) Watch the TIME. The premarket is MUCH MORE ORDERLY than regular market hours. The 5 min candles and ma's update at each 5 minute increment so try to get entries right before the candle close and expect reactions around that 4min and 30 second mark.

5) Once in a trade, watch the noodles to make sure they are moving in your direction and look to scalp into the volume on 1 minute climaxes AND BE VERY AWARE OF THE OVERLAPPING SUPPORT/RESISTANCE LEVELS-- EXIT AHEAD OF THOSE LEVELS AS WELL AS STINKY 2.50's AND STINKY 5's levels--- better to exit too early with a profit than too late with a loss!

6) Be very careful holding past 9:20am as sudden volume can come in quickly as panic can set in from either direction.

MARKET HOURS/OPENING

1) Give the open some time for 3 min 5 period ma's to catch up or down to the stock.

a) More experienced traders can play 1 minute HIGH or LOW band mini pups for an extended panic move within the first 5 minutes, as well as 1/3 minute stars or hammers + 1 min mini pups for tightenings. SCALPS ONLY! ** anything prior to the 3 min 5 period ma catching up to stock is RISKY **

2) Once the 3 minute 5 period ma gets close, the stock will either break and base the 5 period ma and 3 min stochastics will mini pup for a tightening attempt to the 15 period ma. Use the 1 minute stochastics for entry on this and trail the 3 minute 5 and be sure to scalp profits based on 1 min climax hi/lo band mini pup leans/ramps into coil resistance/supports/overlapping support/resistance levels.

3) If you get chopped twice, then step away and wait 30 minutes or so for the 8/13 min 5 period ma's to catch up to the stock and watch for pup/mini pups. The wider time frames are more stable and look for PERFECT STORMS where you get 3 or more mini pups. Even better if the 1 minute trigger forms a mini pup as well.

DEADZONE leave it alone 12-2pm (+/- 30 mins)

LAST HOUR

1) Watch the 60 minute 5 period moving averages. By this time the stock will have gotten near or have tested it. The last hour will usually trigger a mini pup off that 60 minute 5 much like it did in the 3 min chart off the open. You want to play entries near there and then trail off there BUT MAKE SURE that the other times frames are in your favor. You don't want to SHORT the 60 min 5 for a mini inverse pup is the 8/13 min stochastics are in a MINI PUP up formation---- at the very least get the 1/3/5 min DOWN before shorting.


------

Swings/Options/Overnights 2010/2009/2008/2007---


Current:

7/07 - BUY TIBX 12.23, 07/08- PARED 12.80, out + .57, 7/13- PARED 13.05, out + .82, 07/14 - PARED 13.30, out + 1.07, 7/23 - PARED 13.90, out + 1.67, 7/27- SOLD 14.23, out + 2
7/07 - BUY BBI .12, 7/26- pared .20, out + .08
6/11 - BUY BBI .29,
6/14 - BUY BBI .18add, pared .22, out + .04, PARED .27, out + .09, 6/16- pared .29, out + .11

Closed:
7/20 - SHORT GS 149.35, overnight on core swing shares from 141.35, (to avg 145.35 on original core shares), PARED 148.05, out + 1.30, PARED 147, out + 2.35, STOPPED out - 1.65
7/07 - BUY SNDK 43.15, PARED 43.45, out + .30, SOLD 43.60, out + .45, overnight SOLD 44.25, out + 1.10
6/14 - BUY BBI .18add, pared 22, out + .04, PARED .27, out + .09, 6/16- pared .29, out + .11
6/1 - BUY SPY JUNE 109 PUTS at 3.10, PARED 3.85, out + .75, SOLD 4, out + .90
6/1 - SHORT SPY 108.84, PARED 107.84, out + 1, COVERED 107.50, out + 1.34
6/1 - SHORT SPY 109.20add, PARED 107.70, out + 1.70, STOPPED 110.10, out - .90
6/1 - SHORT SPY 109.68add, PARED 107.68, out + 2, 6/2- STOPPED 110.10, out - .42
6/1 - BUY SPY JUNE 109 PUTSadd at 2.75, PARED 3.45, out + .70, PARED 3.75, out + 1, 6/2- STOPPED 2.30, out - .45
5/27 - BUY SPY 110.45, 5/28 - pared 110.85, out + .40, SOLD 110.54, out + .10
5/12 - BUY VHC 5.52, PARED 6.39, out + .87, 5/17- SOLD 7.55, out + 2.03 (+36%)
4/30 - BUY SPY JUNE 120 PUTS 3.45, PARED 4, out + .55, 5/4 - PARED 4.70, out + 1.25, PARED 5.15, out + 1.70, 5/5 - PARED 5.90, out + 2.75, SOLD 6.30, out + 2.85 (80% gain)
4/30 - SHORT SPY 119.62, PARED 119.22, out + .40, swing, 5/4 - PARED 117.80, out + 1.82, PARED 117.30, out + 2.32, 5/5 - COVERED 116.20, out + 3.42

4/29 - BUY POT 110.30, PARED 110.85, out + .55, 4/30- SOLD 112.30, out + 2
4/29 - BUY POT 110.01add, PARED 110.26, out + .25, PARED 110.85, out + .84, ,4/30- SOLD 112.30, out + 2.29
4/19 - SHORT GS 160.50 avg, STOPPED 165.25, out - 4.75
3/12 - SHORT SPY 119.99, PARED 119.83, out + .16, PARED 119.67,- overnight- out + .32, PARED 119.19, out + .80, COVERED 119.05, out + .94
2/23 - SHORT SPYWRA 19.18, PARED 18.80, out + .38
2/2- BUY AAPL 194.60 overnight gapper, 2/3- sold 195.80, out + 1.20
11/11- SHORT DIA 103.56, PARED 102.96, out + .60, PARED 102.66, out + .90, 11/12- PARED 102.40, out + 1.16, COVERED 102.20, out + 1.36
11/10- BUY SPY 109.83, 11/11- SOLD 110.53, out + .60
11/10- BUY SPY 109.40, 11/11- SOLD 110.50, out + 1.10
10/7/09 - BUY SWGVA (SPY Oct 105 puts) at 1.35, SOLD 1.75, out + .40
9/30/09 - BUY SWGVA (SPY Oct 105 puts) at 1.89, PARED 2.70, out + .81, 10/02- COVERED 3.90, out + 2.01
9/23 - BUY SWVGC 2.29 (SPY Oct 107 puts, 9/24- SOLD SWVGC 3.40, + 1.11
4/29 - BOT SPWRA 25.50 postmarket on FSLR sympathy for gapper, 4/30 - Pared 26.75, out + 1.25, SOLD 28.50, out + 3
2/5/09- 4:03 - BUY AAPL 96.50, OVERNIGHT, Pared 97.40, out + .90, SOLD 98, out + 1.50

1/13 - BUY SEED 11 avg,1/16- STOPPED 9, out - 2
1/13 - BUY CAGC 3.25, STOPPED 2.60, out - .65
1/04 - BUY TIVO 7.43 add, avg 7.93, 1/08- STOPPED 7, out - .93
12/26 - BUY TIVO 8.43 avg,
12/17 - BUY WCG 42.70, overnight very LIGHT, 12/18- SOLD 44.50 premarket, out + 1.80
12/10 - BUY WCG 45 SWING/ADD, PARED 47, out + 2, PARED 48, out + 3
12/11- BUY WCG 47.30, add 46.30, avg 46.80 overnight, PARED 47.80, out + 1, PARED 48.80, out + 2, SOLD 49.20, out + 2.40
12/7- SOLD ZIXI SWING LONGS avg $3.20, SOLD $5.50, out + 2.30
12/4- BUY WCG 40.50 SWING, PARED 43.50, out + 3
12/4- CFC Jan12.50 puts, SOLD 3.40, out + .40
ZIXI pared 4.30, out + 1.30
11/9 - BUY ZIXI 2.75 add, avg 3.10, SOLD 5.50, out + 2.40
10/22/07 - BUY YHOO 30.20, PARED 30.60, out + .40, swing, 10/25- PARED 30.90, out + .70, PARED 31.50, out + 1.30, 10/26- YHOO PARED 32.70, out + 1.50, 10/29 - SOLD 34.20, out + 4

9/28 - BUY UNTD 15.03 SWING, 10/1- BUY UNTD 15.45add, avg 15.28, 10/26- SOLD 17.68, out + 2.40

10/26- BUY ZIXI 3.45 SWING,10/29- BUY 4 add (avg 3.65)

10/18 - BUY YHOO 29.60, SOLD 29.85, out + .25
9/28 - BUY UNTD 15.03 SWING, 10/1- BUY UNTD 15.45add, avg 15.28
10/8 - BUY AAOJI .35, STOPPED .09, out - .31
10/8 - BUY AAOKV 2.07, 10/12- STOPPED 1/2 1.57, out - .50 (swing the other 1/2)
9/23 - BUY ICOC 14.90, 9/26 - BUY ICOC 14.30, BUY ICOC 13.75, AVG 14.30, STOPPED 12.90, out - 1.50
9/20 - BUY AAPL 141.20, BUY AAPL 140.60 avg 140.90, PARED 142.20, out + 1.20, SOLD 143, out + 1.80
8/31- LONG BIDZ 8.75 SWING, 9/24 - SOLD 12.30, out + 3.55
9/4 - BUY OSTK 23.45, OVERNIGHT STOPED 22.80, out - .65
8/21 - BUY OSTK 21.42, 8/23- SOLD 22.50, out + 1.08
3:49 - BUY AAPL 136.25, OVERNIGHT, STOPPED 135.25, out - 1
7/23 - BUY TTPY 26, 7/27- PARED 26.50, out + .50, 7/31- SOLD 27.40, out + 1.40
7/12- BUY VRSN 32.80, 7/13- SOLD 34.10, out + 1.30
6/28 - BUY LOCM 6.87, 7/2- pared 7.40, out + .53, PARED 8.50, out + 1.47, SOLD 9, out + 2.13
6/6 - BUY STEM 2.44, overnight, SOLD 2.64, out + .20
6/5 - BUY MED 8.86, PARED 9, out + .14, 6/6- PARED 9.16, out + .30
6/5 - BUY AGEN 2.92, PARED 3.12, out + .20, 6/6- SOLD 2.37, out + .45
6/4 - BUY AMZN 70.45, overnight, 6/5- SOLD 71, out + .55
5/23 - BUY MCHX 14.05, 5/24- PARED MCHX 14.85, out + .80, SOLD 15.20, out + 1.15
4/2 - BUY JSDA 22.15, SOLD 22.35, out + .20, overnight, SOLD 23, out + .85
3/20/07 - BUY ARTG 2.34,
3/6 - BUY NVTL 13.90, 3/7- SOLD 14.40, out + .50
12/7 - BUY CHINA 9.41, STOPPED 8.25, out - 1.16
11/21 - BUY SHLD 172.55, 11/22 - SOLD SHLD 179.55, out + 7
11/20 - BUY PALM 16.07, 11/27 - STOPPED 14.27, out - 1.80
11/20 - BUY SOFO 4.04, 12/21 - SOLD 4.54, out + .50
10/26 - BUY RHAT 14.65, PARED 14.95, out + .30, 10/27 - SOLD 15.65, out + 1
10/09 - BUY PALM 14.85, RANGE/SWING, 10/11- SOLD 15.45, out + .60
9/11 - 3:33 - BUY ANGN 8.35, PARED 8.73, out + .38, 9/12- SOLD 9.90, out + 1.55
8/23 - BUY RMBS 13.22, 8/24 - SOLD 13.92, out + .60
8/14 - SHORT OIH 134.72, overnight, pared 134.42 ,out + .30
8/15 - SHORT OIH 136.10, pared 135.50, out + .60, pared 134.90, out + 1.10, out 134.50, out + 1.60
8/7- SHORT NTRI 49.20overnight, 8/8- COVERED 47.20, out + 2
6/23 - LONG QCOM 39.80avg, 6/24- PARED 40, out + .20, SOLD 40.20, out + .40
6/23 - LONG ERUSL (SEPR july 60 puts) 3.70, 6/24 - SOLD 4.60, out + .90
6/20 - BUY AAPL 57.93, 6/21- SOLD 58.53, out + .60
4/25 - 1:27 - BUY QUUQU $3.20 (aapl may 67.50 puts), STOPPED 2.10, out - 1.10
4/24 - BUY PEIX 32.80, 4/25- PARED 33.50 premarket, out + .70, PARED 34, out + 1.20, SOLD 34.50, out + 1.70
4/10 - BUY PEIX 31.25, 4/11 - SOLD 33, out + 1.75
2/13 - BUY TASR 10.62, OVERNIGHT, 2/14- SOLD 11.25, out + .63
2/8- BUY CTDC 11.67 GAPPER, STOPPED 2/9- STOPPED 11.30, out - .37
2/3 - SHORT SNDK 64.35, PARED 62.35, out + 2, 2/4- COVERED 61.50, out + 2.85
2/2- BUY TWPG 20.05, overnight, 2/3 - STOPPED 19.35, out - .70
2/2- BUY CTDC 11.28, PARED 11.98 , out + .70, PARED 12.38, out + 1.10, 2/3- SOLD 14.28, out + 3



Swings/Overnights 2005---

12/9 - BUY SIFY 8.15, PARED 9.40, out + 1.25, 12/13- SOLD 10, out + 1.85
11/16 - BUY GOOG 397.80, 11/17- PARED 401.80, out + 4, SOLD 403.30, out + 5.70
11/16 - BUY GOPTK 2.50 (goog nov 400 calls), PARED 4, out + 1.50, SOLD, out + 2.50
11/16 - BUY ADBE 33.18, SOLD 33.58, out + .40
11/16 - BUY SNDK 57.10, PARED 57.38, out + .28, PARED 57.60, out + .50, 11/17- SOLD 58, out + .90

10/25 - SHORT PLAY 21.50, PARED 21.28, out + .22, PARED 20.70, out + .80, 10/26 - PARED 20.25, out + 1.25
10/25 - BUY PQPWX 2.15 (nov 2.50 puts on Play), PARED 2.70, out + .55, 10/26 - PARED 3.70, out + 1.55
10/20 - BUY LEXR 7.35 OVERNIGHT, PARED 7.61, out + .26, PARED 7.80, out + .45, SOLD 7.90, out + .55
9/7 - BUY MSO 33.17, 9/8- SOLD 33.47, out + .30
9/7 - BUY ERTS 56.55, 9/8- PARED 56.77, out + .22, PARED 57.15, out + .60, SOLD 57.35, out + .80
8/4 - 10:26 - BUY AMGN 83.10, PARED 83.60, out + .50, SOLD 83.90, out + .80
8/3 - BUY AMGN 82.75, OVERNIGHT, STOPPED 82.50, out -.25
8/3 - BUY WFMI 136.35, PARED 136.70, out + .35, SOLD 136.85, out + .50, OVERNIGHT, 8/5- SOLD 138.80, out + 1.45
8/1- BUY EBAY 43.84, PARED 44.24, out + .40, PARED 44.50, out + .66, SOLD 44.60, out + .76
7/12 - BUY NDAQ 20.65, overnight, 7/18 - SOLD 21.15, out + .50
7/11 - BUY DIA 104.90, PARED 105.30, out + .40, OVERNIGHT,7/12 - PARED 105.60, out + .70, 7/13 - SOLD 106.15, out + 1.25
6/7 - SHORT KLAC 45.33, OVERNIGHT, 6/8- STOPPED 45.46, out - .13
5/31 - BUY IMAX 9.44, PARED 9.60, out + .16, PARED 9.95, out + .51, 6/2- SOLD 10.15, out + .71
5/31 - SHORT BRCM 35.77, COVERED 35.51, out + .26
5/27 - SHORT BRCM 35.86avg, 5/31- STOPPED 35.96, out - .10
5/17 - BUY DIA 103.39, overnight, 5/18- PARED 103.90, out + .51, PARED 104.39, out + 1, PARED 104.80, out + 1.41, SOLD 105, out + 1.61
5/5 - BUY LGF 10.20, PARED 10.28, out + .08, 5/9 - PARED 10.48, out + .28
4/27 - SHORT AAPL 35.88, overnight on daily and 60 min inverse pups, 4/28 -PARED 35.58, out + .30, COVERED 35.28, out + .60
4/26 - 3:44 - SHORT CTSH 40.95, overnight swing daily inv pup, 4/27 - PARED 39.75, out + 1.20, COVERED 38.75, out + 2.20 weeee
4/26 - SHORT EBAY 30.90 and 31.29, avg price (31.11) overnight on daily inverse pup, 4/27 - STOPPED 31.40, out - .29
3/31 - SHORT NUE 57.72, PARED 57.42, out + .30, 4/1- STOPPED 57.85, out - .13


3/28 - BUY SYNA 24.05, overnight, 3/19 - STOPPED 23.90, out - .15
3/28 - SHORT LEXR 5.59, PARED 5.43, out + .16, PARED 5.20, out + .39, overnight, 3/29 - COVERED 5.02, out + .57
2:35 - BUY SYNA 24.05, overnight, STOPPED 23.90, out - .15

3/23 - BUY CHKP 20.75, OVERNIGHT TOPS and daily hammer, 3/24 - SOLD 20.98, out + .23
3/21 - BUY SYNC 3.27, GAPPER, 3/22 -STOPPED 3.25, out - .02
3/9 - SHORT PLMO 22.50, overnight, 3/10 -PARED 22.35, out + .15, COVERED 22.10, out + .40
3/8 - SHORT QLGC 42.21, overnight, 3/9- STOPPED 42.71, out - .50
3/4 - BUY SMH 34.10, overnight, 3/7 - SOLD 34.50, out + .40
3/4 - BUY QQQQ 37.62, overnight, 3/7 - STOPPED 37.58, out - .04
3/3 - BUY QQQQ 37.45, PARED BUY 37.15 (avg 37.30), 3/4 - PARED QQQQ 37.57, out + .27, SOLD 37.62, out + .32
3/3 - BUY DIA 107.77 (avg 108.05), 3/4 - PARED 108.80, out + .75, PARED 108.96, + .81, SOLD 109.10, out + 1.05
3/1 - BUY DIA 108.40, 3/2- PARED BUY LONG 108.03,
2/25 - BUY AAPL 45.57, GAPPER, 2/28 - STOPPED 45.40, out - .17
2/18 - SHORT QQQQ 37.37, 2/22- PARED 37.05, out + .32, COVERED 37.10, out + .27
2/17 - SHORT AAPL 88.40, PARED 88.20, out + .20, PARED 87.90, out + .50, overnight gapper down, 2/18 - COVERED 88, out + .40
2/16 - BUY AAPL 89.95, PARED 90.15, out + .20 overnight gapper, 2/17- SOLD 90.70, out + .75
2/14 - BUY BRCM 33.15, gapper, STOPPED 33.09, out - .06
2/14 - BUY AAPL 84.70, gapper, 2/15- PARED 86.10, out + 1.40, PARED 86.50, out + 1.70, SOLD 86.80, out + 2.10
2/11 - BUY AAPL 81.40, OVERNIGHT, 2/14- PARED 82.25, out + .85, SOLD 82.60, out + 1.20
2/9 - SHORT ATVI 20.28, overnight, COVERED 19.70, out + .58
2/8 - SHORT GOOG 197.60 avg., STOPP 200, out - 2.40
2/7 - SHORT QCOM 36.07, PARED 36.90, out + .17, OVERNIGHT, COVERED 35.47, out + .60
1/19 - SHORT QQQQ 38.10, overnight, PARED 37.90, out + .20, COVERED 37.65, out + .45 (postmarket)
1/18 - BUY ASTM 3.19, PARED 3.27, out + .08, PARED 3.33, out + .14, 1/19- SOLD 3.60, out + .41
1/10 - BUY GOOG 198, BUY 196.50, BUY GOOG 195.20, avg 196.20, 1/11 - PARED 197.40, out + 1.30, 1/11 - STOPPED 194, out - 2.20

Swings/Overnights 2004---

12/16 - BUY TASR 27.67, STOPPED 27, out - .67
12/13 - BUY MSO 26.62, PARED 26.85, out + .23, 12/14- PARED 27.20, out + .58, PARED 27.62, out + 1, SOLD 28.12, out + 1.50
12/7 - BUY WIND 14, PARED 14.50, out + .50, SOLD 14.20, out + .20
12/2 - PARED ROXI 10.10, out + .85, SOLD 10.25, out + 1
11/24 - BUY EBAY 112, 11/29- PARED 112.70, out + .70, PARTIAL STOP 111.65, out - .35, 11/30 - PARED 113.25, out + 1.25, STOPPED 112
11/22 - BUY ROXI 9.25, 11/29 - PARED 9.65, out + .40
10/19 - SHORT SBUX 50.17 avg, 10/20- STOPPED 50.25, out - . 08
10/14 - BUY TTWO 34.73, 10/19 - PARED 35.46, out + .73, SOLD 34.95, out + .22
9/30 - BOT ROXI 5.04, 10/21- PARED 5.84, out + .80, 10/22 - SOLD ROXI 6.05, out + 1.01
8/30 - BOT NQ 1382 (rehedge), SOLD 1381, out - 1, BOT 1376, STOPPED 1374, out - 2
8/27 - PARED DIA short 102.06/102.18, avg (101.26), PARED QQQ 34.56 (avg 33.79), SOLD NQ 1388.50, out + 32.50, STOPPED DIA, QQQ, YHOO, VZ
8/19 - BOT NQ 1356 (hedge)
8/18 - SHORT DIA 100.58 avg, SHORT YHOO 28.14 avg, SHORT QQQ 33.55, SHORT VZ 38.75
7/29 - BOT AMZN 38.83, 8/2- STOPPED 38.15, out - .68
6/29 - STOPPED CNET 10.97, out - .14, SOLD CMVT 19.55, out + .25, STOPPED BORL 8.48, out - .27
6/28 - BUY BORL 8.75, BUY CMVT 19.30, BUY CNET 11.11
5/24 - STOPPED REST OF DIA SHORT 100.15, out - .08
5/18 - COVERED QCOM 63.23, out + .20 (locked), PARE COVERED DIA 99.85, out + .22, COVERED ERTS 50.33, out + .29, COVERED ERTS 49.91, out + .68
5/17 - PARE COVERED QCOM 62.01, out + 1.42
5/14 - SHOT DIA 100.81 (avg 100.07), PARED COVER JNPR 21.18, out + .80, 21.01, out + .97, COVERED 20.89, out + 1.09
5/12 - SHORT JNPR 21.98, ERTS 50.62, QCOM 63.43, SHORT DIA 99.89
5/4 - PARED YHOO SHORT 53.80 (avg 52.70), PARED DIA SHORT 103.90 (avg 103.40)- 5/12 - COVERED DIA 100.40, out + 3, COVERED YHOO 52.20, out + .40
5/3 - SHORT YHOO 51.60, COVERED out pared shorts ^^
4/30 - SHORT DIA 103.13, pared 102.61, out + .52


Swings 2003---

12/27 - BUY NANX 7.04, 12/29 - PARED 8.60, out + 1.56, PARED 9.04, out + 2, 1/6- SOLD 11.50, out + 4.46
12/5 - BUY NGEN 6.16, 12/27 - PARED 7.25, out + 1.05, 12/29 - pared 8.20, out + 2.04, PARED 9.16, pared + 3, PARED 10.16, out + 4, 1/02 - PARED NGEN 10.90, out + 4.86, PARED 11.70, out + 5.54
12/1 - BUY NVLS 43.35, 12/3 - PARED 43.92, out + .57, STOPPED 41, ouT - 2.35
12/1 - BUY DIA 99, 12/3 - PARED 99.53, out + .53, 12/9 - PARED 99.80, out + .80. 12/10 - SOLD 100, out + 1
11/17 - SHORT EBAY 53.85, PARED SHORT 54.35 (avg 54.10), PARED profits 52.70, out + 1.40, 11/18- PARED 52.20, out + 1.90, PARED 51.65, out + 2.45, COVERED 51.20, out + 2.90
8/4 - BUY MUSE 8.51, 8.5 - PARED 8.83, out + .32, 8/9 - SOLD 9.05, out + .54
8/4 - BUY EBAY 102.80, 103.80, 104.40 and 105.10, 8/5- SOLD 104.10, out + 1.30, + 30, out -.03 and - 1
7/14 - BUY LOOK 3.95, pared 4.25, out + .30, 7/28 - pared out 4.60, out + .65
7/11 - SHORT DIA avg pared 91.20, 7/14 SHORT DIA 92.65, avg cost 91.90, 7/15- PARED 91.15, out + .5, 7/16 - PARED 90.70, out + 1.20
7/9 - BUY QAVTF 1.15, 7/10 - PARED 1.50, out + .35
6/23 - BUY DAVTJ 1.50 (dia aug 88 puts), 7/1 - PARED $2, out + .50
6/18 - BUY LOOK 2.73, 6/19 - PARED 3.13, out + .40, 7/2 - SOLD 3.90, out + 1.17
6/6 - BUY ATYT 8.35, SOLD 8.75, out + .40
6/6 - BUY BRCD 7.64, 6/10 - STOPPED 6.90, out - .74
6/6 - BUY SSTI 5, 6/13 - STOPPED 4.30, out - .70
6/2 - BUY CSCO 16.89, PARED 17.19, out + .30, 6/4 - SOLD 17.45, out + .66
5/30 - BUY MSFT 24.78, 6/4 - PARED 25.20, out + .42
5/29 - BUY DIA june 90 calls .60, 6/2 - pared 1.25, out + .65, 6/4 - pared 1.80, out + 1.20, 6/6- Pared $3, out + 2.40 (+350%)
5/27 - BUY TECD june 30 calls .20, BUY TECD june 22.50 puts .15, straddle for earnings, 5/29= SOLD TECD puts at .40, out + .20
5/15 - BUY DAVGG 4.20 (dow july 85 call, 5/27 - STOPPED 2.60, out - 1.80
5/12 - BUY MSFT 26.22, 5/28 - STOPPED 24.60, out - 1.62
4/29 - BUY DIA 85.10 (avg cost), 5/6- SOLD 86.50, out + 1.40, 5/12 - SOLD 87.50, out + 2.40
4/21 - BUY UBET 3.25, 7/29 - PARED 4.40, out + 1.25
3/31 - BUY HNZ 29.30, 4/15 - sold 30, out + .70
3/31 - BUY OEX 430 (april 430 calls), target hit 447, out + 17
3/29 - SHORT MSFT 24,85, COVERED 24.10, out + .75
3/29 - SHORT QQQ 26.29, 3/31 - COVERRED 25.29, out + 1
3/29 - SHORT DIA 81.90 (avg cost), 3/31 - COVERED 79.50, out + 2.40
3/26 - BUY DAVPE 2.70, 3/27- PARED 3.20, out + .50, 3/31- COVERED 4, out + 1.30
3/13 - BUY CSCO 13.17, SOLD april 12.50 calls + 1.25, 4/21 - out covered calls + .58 on spread premium
3/12 - BUY DAVDW 3.40, 3/13- SOLD 4.70, out + 1.30
3/12 - BUY SMH 22.32, 3/13 - SOLD 24.20, out 1.88
2/26 - SHORT VRTS 16.93, 3/3- PARED 16.48, out + .45, 3/4- PARED 16, out + .93, 3/5 COVERED 15.70, out + 1.23
2/25 - BUY NQ 978, SOLD 1001, out + 23
2/11 - BUY LVLT 5.34, target $6-6.50 range, STOPPED 4.94, out - .40
2/11 - BUY ASKJ 6.15, target $9.50-12 range, 2/19- SOLD PARTIAL June 7.50 calls @ .90, 2/20 - PARED 7, out + .85, 2/21- PARED 7.35, out + 1.20
1/27 - SHORT IBM 79.05 pared, pared 77.70, out + 1.35, 1/31 COVERED 77.10, out + 1.95
1/9/03 - BUY SYQBI 3 (symc feb 45 calls), SYMC 45, target 50-52 range, 1/10/03 - PARED 4, out + 1, PARED SYMC 46.70, out + 1.70 1/13- PARED 4.30 out + 1.30, PARED 47.30, out + 2.30 1/15- postmarket, SOLD 48, out + 3


We are now posting illustrations throughout the DAY of setups, these update automatically and can be seen here click here make sure to hit the refresh button

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Can money be made in this market? YES. Click here to read our 2002 Roundtable session where several of our successful members share their stories on the journey through the learning curve
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*** exits are subjective to the trader, the basic rule of thumb is to always pare or clip the .10 OVERSHOOTS especially near 2.50 support/resistances, whole numbers and 200pd 1/3min support/resistances ***

** we now have audio Voice post market Debriefing in the Pit :)

Underground Manifesto:


We want to graciously thank our members for their support throughout the years as undergroundtrader.com kicks off its 8th year of service. Last years resolution for every member was to stick to the basket method of trading. This year, we hope more and more traders will come to see the light and embrace this method. The advent of decimalization poured salt on the wound as stock prices deflated with the volume providing the toughest trading terrain possible in 2001 as stocks seemed to float in a range on light volume only to panic and then resume ranges. Throughout this period, the theme "that which does not kill you makes you stronger seemed to emanate daily". As much as clean victories with the least amount of resistance is what every trader wants to attain following in the lines of Sun Tzu, these conditions are not always present and thus a different type of battle emerges, one that can best be summed up as a war of attrition. Throughout this year, we have learned that one trade nor one day nor one drawdown week is not the end. It is but a blip in your trading career. We learned to grow a tougher and thicker skin and to reach down inside and pick ourselves back up when a probable setup does the improbable because in the end, it is all a numbers game... a game of probability. The GOAL of the game is to recognize and ACT on the TRANSPARENCY before it becomes TOO TRANSPARENT at which point the window of profitability shrinks. We learned to play the lightest volume with windows of opportunity that were the size of keyholes in an effort to train ourselves to to be better than the next trader. To be able to count the stitches on a fastball. While others whined and moaned, we sat and watched and watched and watched 8 hours a day in front of those monitors making ourselves better, more aware, able to anticipate, REACT and give us the EDGE. What may seem like a dead market at time is a test of discipline and patience to us. We learned to ease up on the gas pedal and tap the brakes to adapt to the rhythm as volume slows down. We learned that the best liquidity is to sell into the buyers and cover from the sellers and that PANIC is a gift in any situation so long as we are not on the tail end of it. Early entries, sweet spots and late entries make up your trades and we learned in light volume the late entry is a mistake. The early entries imply more risk but is proportionate to the reward. The sweet spot is the ideal entry to get in just in time for the panic pump and be out into the buyers or sellers.

Looking back in your own career as a daytrader. Remember when you first got into this game. Remember when you owned shares in your 'investment' account of a stock perhaps it was AMAT. You were always told that stocks are the company and fundamentals drive stock prices up and down. However, there was a fallacy with that explanation. If AMAT some material news? Then why did AMAT trade in a 2pt range from 42.50 to 44.50 ? Was there some news that I didn't hear? What makes AMAT move like it does throughout the day? Surely, it can't only move on news and fundamentals... and what if I could just buy AMAT at 42.70 and dump it above 43.50?? Wouldn't that be more prudent than sitting through all these moves up and down?

Remember, asking your broker "why is AMAT up and down throughout the day?" and getting some response like "well, we are only thinking long term here so don't sweat it". This is when the hunger for knowledge started to grow as your curiousity is not only piqued but now becomes an obsession. The circle of knowledge was incomplete and you set out to LEARN what makes stocks move intraday if it isn't news or fundamentals. This is the first step to daytrading.

Throughout your quest, you asked yourself how can anyone know when someone is going to put in a buy or a sell order. It seems completely random? How on earth can anyone track the buys and sells and anticipate when they will happen? This is pure gambling. There is just no way to know what each shareholder is doing at any point in time.

You read books. You visited many websites. You got a browser based broker account. You got realtime quotes. But there were many MISSING pieces and you struggled to get a clear answer. Perhaps, you got your feet wet and dipped your toes in this game early on and lost a leg. Perhaps you made money piling into a novelty stock or a internet stock in 2000 and thought that THIS is DAYTRADING, I love it and then got clawed by the bear only to resume your search to find out WHY?

One reason or another, your path lead you to the undergroundtrader.com trading pit. Your first day in the Pit, you were overwhelmed with the terminology "noodles" "pups" "cranks" "overshoots", what language are they speaking?!? But interestingly, stocks seemed to move as they were called and in most instances they foreshadowed a lot of the moves and from that point on... your eyes were opened. Finally, it starts to make sense. Every day it gets hammered into your head:

STOCKS ARE NOT THE COMPANY. Stocks are a 4 letter word that move according to the futures. As the futures rise, stocks will bid up and as they fall stocks will bid down. As stocks move higher in price, their floats get thinner and stocks tend to move faster. As stocks get cheaper in price, their floats grow and they move slower. The market moves top down from the futures then the tier 1 generals in each sector and then the tier 2's and tier 3's and so forth. It's MAKING SENSE! If AMAT moves up, then NVLS and KLAC follow. Wow. Tier synergy! Eventually for each need, you learn another tool to follow.

At first you just start with Nasdaq level 2 and see those large sizes on the bid pop a stock for a few seconds and then see the stock panic back down and vice versa. You spot one market maker but can't read his motives. Its very confusing. The need arises where you ask yourself, how can i make sense of these sporadic Nasdaq Level 2 movements. You learn a tool called a stochastics chart. This chart is composed of a grid from 0 to 100 and two lines called stochastics oscillators %d and %dslow. You learn that this chart measures overbought and oversold conditions. When the stochastics lines are under 20 band they are oversold, when they are above the 80 band the stoch is overbought. Makes sense and as you watch nothing but Level 2 and the 1 min stochastics chart, it fills in a piece of the puzzle. Basicaly buy signals are when the %d cross the %dslow up through the 20 band and vice versa down through the 80 band on short signals. All this makes sense.... until you see that the 1 min stochastics sitting under the 20 band cross back up and slip again. You start to lose faith in the tool as it is not 100%. You ask yourself why is it that sometimes AMAT will be trading at 43.05 near its highs and wiggle to 42.90 as the 1 minute stochastics slips under the 90 band ready to cross the 80 band and then AMAT pops to 43.20 as the 1 min stochastics resumes to bounce back up through the 90 band?!? Stochastics ain't telling me enough here. Why is it sometimes stocks will sit near its highs and the stochastics doesnt drop for like 30 minutes? Or stock will hold near its highs and the stochastics will make a full oscillation? You quest continues to fill in the pieces of the puzzle.

Enter the 3 minute simple moving averages chart. This chart composed of a simple 5 period moving average and a 15 period moving average. They paint the direction of the TREND as well as proving supports and resistance levels. You learn firsthand the power of a consolidation breakout and a PUP breakout. Interestingly, you also learn that most breakouts start at a high band 1 minute stochastics reading because they all start off as minor short squeezes. Market makers are heding constantly in a stock with the noodles and if the noodles or the stock maintains a high band stochastics long enough, they are forced to hedge back to the longside thereby forcing a short squeeze. It then trigger real buyers and traders to step in and a snowball effect happens. Wow. Makes sense once again. You notice an uncanny phenomenon. When you click the 5 and 15 period lines, you notice how well the stock tends to coil off the 5 period when its breaking out. This is an ACTIVE uptrend making higher highs (ala 5 period) and higher lows (ala 15 period). This is an uptrend and an active uptrend will always trade higher than the 5 period simple moving average and thereby allows you to keep a profit stop when that 5 period breaks. You learn what a PUP breakout out is as Jay explains that the 5 period acts as a resistance by the shorts/sellers yet the 15 period is a the quiet buyers slowing lifting their bid prices, the classic immovable object versus the unstoppable force situation. When the 5 period gets penetrated, the buyers charge and the barabarians break down the gates as market makers trampled over each other to hedge long and a dynamic breakout or breakdown can occur. You see this happen in REAL time and you are amazed.

Finally, you ask yourself, how can I get a heads up on the movemets of the stochastics or a potential breakout? Simple. You chart the nasdaq 100 futures (aka noodles) on a 1 and 3 minute stochastics chart. The 1 minute noodles is the lead indicator that triggers the 3 minute noodles and all your other tools. Truly a synergistic effect.

"I can see!" said the blind man. Everyday you learn something. You learn that inidividual buy and sell trades don't affect the market. The big boys which are the institutions and funds move the markets. Stock can move without a single share being traded because market makers adjust spreads to the futures. YOu learn that the game is to REACT and not predict. However, we used the charts to track the footprints of the big boys. YOu learn what a buyside and sellside fade is and the effects of cranks and crosslocks. You learn about the rhythm of your stocks, the tier synergy effects the nuances. The no brainer setups like a low of the day at a high band 3 min noodles inv pup formation as a short and vice versa for a long. You learn to put a lot of emphasis on the futures as they are the HAND THAT holds the puppet strings to your stocks. You learn about the ovetrshoot panics and the 2.50 support/resistance lines and about adapting everything into the context of the noodles.

You learned the rules to the GAME. No one can predict WHERE stock prices will go. However, knowing the trend, the support and resistance levels from different time periods, you can gauge where a stocks resistance will be and be prepared to sell into those buyers and vice versa on shorts. In essence, you learn what the true probabilities are... and the real game is to react not to predict... to take ACTION on TRANSPARENCY BEFORE it BECOMES TRANSPARENT. You learned the GAME.

What seemed like an ocean of confusion in the beginning has now to shrunk to a few 20inch monitors on your desk, your terrain... your opportunity to make or lose money. People from across the globe all focused at any given moment in time at one point... in an effort to take your money or you to take their money. It's beautiful. Poetry in motion. Welcome to the greatest speculator sport in the world and you are a player... a trader. You have arrived. :)


The journey doesnt end there. Once you have the tools and the basket stocks, you battle with consistency. But you grow with each new battle. The markets constantly shift paradigms. You learn to adapt, anticipate and pull the trigger. You grow.... with us... together. Many of us spend more time in the Pit than our own family and in a sense we are a FAMILY. We share in triumphs and the greatest highs and also the defeats and the greatest lows from 8:30am to 4:30pm every trading day. We sit in the trenches as snipers and wait for the next trade patiently, methodically and decisively. The journey is the reward.





Respectfully,


Jay



Basket Trading Methodology:

The dart throwing BULL market came to an end and those traders and investors who were simply lucky... fell through the cracks. This year was one of major contrast and truly was the best training environment to any trader who really wants to learn this game from the trenches. If you survived this market, you can survive and excel in any market. If you didn't survive this market, chin up. A hiatus is the best medicine to regain clarity.

We learned many things this year as clarity and FOCUS was the theme. The lack of these two qualities lead most traders to failure.

As we have preached daily about the importance of trading basket stocks, many have listened and exceled in the worst market conditions. These BASKET STOCKS are your source of income, bread and butter, personal ATM machine. If you have not picked out BASKET stocks, we ask that you take this pledge for the new year 2001:

I WILL PICK ONE BASKET STOCK AND FOLLOW IT ALL DAY, EVERYDAY WITH THE TOOLS. I WOULD RATHER BE BORED THAN BROKE.

^--- Post that on a sticky note and tape it to your MONITOR and read that everyday to yourself.

Now that we have that straight, let's get deeper. As is our style, substance is what you need... not just fancy cliches and textbook metaphors. Please print these steps out and tape them to your Monitor-- follow these steps daily until you turn blue in the face from boredom.

1) PICK A BASKET STOCK
These are some good candidates:

1) MSFT - Moves with the noodles and dow. Good volume, good volatility and oscillations, channels can get tight in lighter volume so be careful not to overtrade light volume.

2) KLAC - leader of the semi makers and thus sox.x. moves with the noodles. the naz can't move much in a direction without the support of the semi makers. therefore when noodles are rising but klac is sell fading likely, the noodles will give and reverse ....

3) QLGC - fast mover, leads the sans sector. good oscillator moves well with the 1 min stochastics, be careful on the open as they love to crank and lean this one.

4) INTC/CSCO/ORCL - very thick former tier 1's. look more for the trending moves rather than scalps since they move so slow.
2) WATCH YOUR BASKET STOCK WITH YOUR INDICATORS
a) Watch how stock MOVES with the 1 and 3 min noodles
b) Watch 3 min ma trend- 5pd resistance, 15 pd support
c) Watch the BEAUTIFUL synergy with 1 min stoch, the 1 min stochastics chart is only useful for the extreme overbought and oversold reversals that means under 20 band oversold reversal back through 20 band for longs and over 80 band reversal back under for shorts
d) note the wider time frames for foreshadowing effects 8/13/60 min on noodles and stocks
e) Put it all together and see the synergies--- NEWS means nada. Stocks move in ranges because market makers adjust prices to the futures thereby the noodles are your lead indicator! When futures move UP and stock doesnt, then it may be FADING into the buying aka a SELLSIDE BIAS and vice versa on a buyside bias.

3) PLAY ONLY 1 MINUTE STOCHASTICS REVERSALS ON PAPER!
a) Best long setups for scalps? 1 minute stochastics reversal through 20 band back up coupled with 1 minute noodles stochastics-- and 3 minute noodles uptrend emergence. Vice versa 80 band reversals for the short.
b) On a PANIC or MOMENTUM breakout, the shorts can be measured to the 5 period and 15 period for full 3 min noodles oscillations down.
c) On a PANIC or MOMENTUM breakdown, the upside on the long reversal can be measured to the 5 period and 15 period. Eg: CIEN panics down from 93 to 90-1/4 as noodles take a pullback. 1 min stochastics tries to reverse back UP and 1 min noodles turning back up through the 20 band 3 min noodles stall. CIEN 3 min ma chart shows 5 period at 92-1/4 and 15 period at 92-3/4, so a stochastics bounce entry here at 90-1/4 x 90-1/2 tells me my upside is 92 x 92-1/2 range so that is the proverbial MEAT between the bones.

*** important! Be patient and papertrade or use a simulator. Dont worry about gains, worry about clips. 1/4 to 1/2 is ALL you need in the beginning, never kickyouself for getting out too soon *** Stochastics WORKS! You don't believe me? Pull up any stock on a 1 minute stochastics chart with an adjoining tick price chart and see how 7 out of 10 times the oscillations proved to be effective in the PRICE of the stock-- the proof is before your eyes.

4) GET YOUR SCALPS PROFITABLE 7 OUT OF 10 TIMES ON PAPER
a) This will be boring waiting for formations to emerge, but you should be hitting 70-80% success rate on your entries for scalps. The amount of the scalp DOESNT matter at first, only that you got a good entry with little wiggle and got an exit. This is your foothold and foundation you need in the beginning with a Basket stock.

5) TRADE CASH FOR ONLY 100 SHARES OF YOUR BASKET STOCK
a) 100 shares is NOT TO MAKE MONEY. it is to try to DUPLICATE your paper results to real life. This means you take 1/4 to 1/2 scalps with 100 shares to hone skills in real life WITHOUT sweating the Money, this allows you to focus on TECHNIQUE. The money will come later. DO NOT FOR A SECOND DELAY TAKING PROFITS BECAUSE YOU ARE ONLY PLAYING 100 shares. YOU ARE NOT LOOKING TO MAKE $$. YOU ARE LOOKING TO PERFECT TECHNIQUE!!
b) Once you can duplicate paper results to cash, hitting 70-80% success rate, then you are ready to increase your share load-- now you are ready to make $.

6) INCREASE SHARELOAD INCREMENTALLY
a) from 100, to 200, to 300, to 400, to 500, etc..
b) You should go SLOWLY so that you dont shake your equilibrium as far as your comfort level when in the trade. start with 100/200 shares and EARN the right to play more shares. only after 4 of 5 days green up shars by 100 shares evry 2 weeks. if you slip to 2/3 days green drop down by 100 shares for a week.
c) You will KNOW when you are taking too many shares because you will FEEL ANXIETY <-- NOT GOOD. Drop share load back DOWN when this happens.

7) DON'T OVERTRADE WEAK SIGNALS!
a) Deadzone and consolidations on light volume a no no

8) LEARN TO PARE SHARES INTO 3 MIN NOODLES UPTRENDS
a) This is the highest level when you have got scalps down pat, now you are playing larger shares to be able to PARE into sellers on rising 3 minute noodles even though 1 minute noodles may stall. The reason behind paring is to take some money off the table to give you cushion on the wiggles prior to a greater move.

9) BE CONSISTENT!
a) You should be hitting green on a daily basis-- understand oscillation days are best for stochastics moves and trend days are best for 3 min ma breakout/down patterns. Do not overtrade light volume

10) PICK ANOTHER BASKET STOCK (GO BACK TO STEP 1)


Phew! Thats a mouthful for you to swallow, BUT IT WORKS! Ask anyone in the Pit who is making steady consistent GREEN daily and they will tell you, the basket stock trading method is the ONLY way to go! We just touched on the basics here but START with these steps. You need a FOOTHOLD before you can climb a mountain. The above takes FOCUS and discipline to implement. It works. The question is do you have the CONTROL to implement the above?











Undergroundtrader.com

ps: if you have not gotten a copy of the NEW undergroundtrader handbook from mcgraw hill, here is a link to order

click here

Respectfully,

Jay Yu
Head trader
The UndergroundTrader

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