The TOUGH go to Tim Knight, founder of Prophet.net and my FAVORITE Bear Blog, The Slope of Hope. Tim is an Uber-Bear, so he THRIVES on down markets, so in my opinion, it is a GREAT place to find shelter (and get some awesome Bearish ideas) in turbulent times like now.
I am in all cash right now, with the exception of VLO, which I have held a long time, and will continue to hold and sell Covered Calls. However, if this is the start of a correction (and there are a LOT of broken support lines today), then it could ba a time to back up the truck and wait for some excellent buying opportunities.
If this seems to be a longer term Bear trend, and you don't like to short the market or buy Puts, you can always buy the Bearish ETF's: DXD (Dow), QID (NASDAQ) and SDS (S&P).
This also may be a good time for some "Dead Cat Bounces," stocks which get pummeled in earnings (or get dropped for no other reason but the sector/market tide is moving out), but end up rebounding a few points a few days later.
Let's get some ideas out there for the group to analyze some trades and put our collective heads together and make some MAAAAAAD MONEY! (I made a LOT of $$$ using the "Force Index" indicator which I never knew of until I attended April's meeting...so yes, we ALL can learn a little something together!)
Remember....ALWAYS, ALWAYS, ALWAYS manage your risk!!!
Happy Trading
Thursday, July 26, 2007
Monday, July 23, 2007
Gettin' Back In the Groove
Hey Gang:
For those of you that hadn't heard, my wife Sylvia gave birth to our son, Ethan on May 17th. For those of you who are parents, you know the sea change my life has taken...for the better! Now that Ethan is starting to sleep longer, and by association, his father, I'll be able to get back into the blog. So, check back here to see any updates, and be sure to make any suggestions for plays.
A Valuable Lesson Learned
Recently, I had a position in CAT which reported earnings on Friday, which was Options Expiration Day. In hindsight, I missed a GOLDEN opportunity to make a LOT of money with limited risk. How? By playing a July $85 Put on Thursday. The high on thursday was $87.00, and you could have bought an "expensive" July $85 put for $0.85. I say expensive since $0.85 seems a lot for a stock that is $2 OTM. Anyway, for a one day play, it was "cheap" in the sense 10 contracts was worth $850, but if the stock plummeted, you could make a bundle.
So what happened?
CAT tanked over $7 at the open (and was down over $8.00 at one point) and the July $85 Puts went from $0.85 to over $6.00! That is a 706% return in one day!!
What's the lesson?
Perhaps next earnings season, you may want to see which companies report on that Thursday, and see if there are some "cheap" Puts/Calls to play for October's expiration? Just an idea...I welcome yours!
As an aside, you'll note the PERFECT bounce off channel support...
Happy Trading!
For those of you that hadn't heard, my wife Sylvia gave birth to our son, Ethan on May 17th. For those of you who are parents, you know the sea change my life has taken...for the better! Now that Ethan is starting to sleep longer, and by association, his father, I'll be able to get back into the blog. So, check back here to see any updates, and be sure to make any suggestions for plays.
A Valuable Lesson Learned
Recently, I had a position in CAT which reported earnings on Friday, which was Options Expiration Day. In hindsight, I missed a GOLDEN opportunity to make a LOT of money with limited risk. How? By playing a July $85 Put on Thursday. The high on thursday was $87.00, and you could have bought an "expensive" July $85 put for $0.85. I say expensive since $0.85 seems a lot for a stock that is $2 OTM. Anyway, for a one day play, it was "cheap" in the sense 10 contracts was worth $850, but if the stock plummeted, you could make a bundle.
So what happened?
CAT tanked over $7 at the open (and was down over $8.00 at one point) and the July $85 Puts went from $0.85 to over $6.00! That is a 706% return in one day!!
What's the lesson?
Perhaps next earnings season, you may want to see which companies report on that Thursday, and see if there are some "cheap" Puts/Calls to play for October's expiration? Just an idea...I welcome yours!
As an aside, you'll note the PERFECT bounce off channel support...
Happy Trading!
Tuesday, May 15, 2007
$NDX Bull vs. Bear Battle Royale
Hey Gang:
I haven't posted much because our first child, Ethan, is due on Thursday.
My last post was about "Sell in May and go away." Well, the market hasn't shown much selling lately, but there seems to be a Battle Royale at the top of the $NDX Ascending Channel. Here is the chart:
The $NDX has neutralized its trend and just doesn't seem to know what to do. The MACD suggests that a downturn may be imminent, but this market has seemed to have a mind of its own. For all the "bad" news that has been tossed around (the Fed pausing again notwithstanding), I am surprised the market hasn't begun selling off into summer...yet.
Anyway, hope y'all are well and Happy Trading!
I haven't posted much because our first child, Ethan, is due on Thursday.
My last post was about "Sell in May and go away." Well, the market hasn't shown much selling lately, but there seems to be a Battle Royale at the top of the $NDX Ascending Channel. Here is the chart:
The $NDX has neutralized its trend and just doesn't seem to know what to do. The MACD suggests that a downturn may be imminent, but this market has seemed to have a mind of its own. For all the "bad" news that has been tossed around (the Fed pausing again notwithstanding), I am surprised the market hasn't begun selling off into summer...yet.Anyway, hope y'all are well and Happy Trading!
Monday, April 30, 2007
Sell In May and Go Away?!?
"Sell In May and Go Away."
That is a famous rhyme from Wall Street. The theory is that the senior traders move from Wall Street to the Hamptons for the summer and the junior traders take over. This has been a trend for the past few years, and with the phenomenal run up the past two months after February 27, will the Big Boys sell off, happy with their profits and head for the beach? Time will tell, but here is an interesting look at the $NDX:
The 5 year chart shows a clearly defined Ascending Channel:
A closer look o n the 1 year chart reveals the index is at the Channel Resistance.
An even closer look at the 3 Month chart reveals the index hit resistance a couple of days ago and has begun to fall off. By looking at the 1 Year chart above, you can see how far the $NDX could potentially fall if it repeats last year's action. Something to be mindful of.
So what can you do to play the "Bearish" side of the market (but hate Puts and Shorts)? Buy DXD (Dow), QID (NASDAQ) and SDS (S&P 500) ETF's which allow to to "buy" a bearish position.
Happy Trading!
That is a famous rhyme from Wall Street. The theory is that the senior traders move from Wall Street to the Hamptons for the summer and the junior traders take over. This has been a trend for the past few years, and with the phenomenal run up the past two months after February 27, will the Big Boys sell off, happy with their profits and head for the beach? Time will tell, but here is an interesting look at the $NDX:
The 5 year chart shows a clearly defined Ascending Channel:
A closer look o n the 1 year chart reveals the index is at the Channel Resistance.
An even closer look at the 3 Month chart reveals the index hit resistance a couple of days ago and has begun to fall off. By looking at the 1 Year chart above, you can see how far the $NDX could potentially fall if it repeats last year's action. Something to be mindful of.
So what can you do to play the "Bearish" side of the market (but hate Puts and Shorts)? Buy DXD (Dow), QID (NASDAQ) and SDS (S&P 500) ETF's which allow to to "buy" a bearish position.
Happy Trading!
Wednesday, April 18, 2007
Oil and Gas Operations
Hey Gang:
Just a quick FYI...there seems to be a incoming tide into Oil and Gas Operations ($OILPRD) as there has been a heavy flow of institutional money into the sector recently. Here is a quick snapshot of the Big Chart on VLO.
The sector was at a low of "0" back on 2/2, but now it is at "86." That is a sector rotation if I ever saw one. Perhaps with summer driving season coming up, they are looking at the refiners like VLO, TSO and company?
Happy Trading!
Just a quick FYI...there seems to be a incoming tide into Oil and Gas Operations ($OILPRD) as there has been a heavy flow of institutional money into the sector recently. Here is a quick snapshot of the Big Chart on VLO.
The sector was at a low of "0" back on 2/2, but now it is at "86." That is a sector rotation if I ever saw one. Perhaps with summer driving season coming up, they are looking at the refiners like VLO, TSO and company?Happy Trading!
Monday, April 16, 2007
CCJ En Fuego, ZHNE, and More!
Hey Gang:
CCJ is "En Fuego," the stock is just a machine right now. Uranium prices are soaring and CCJ is benefitting nicely. So today, the stock broke through the Ascending Channel I drew so now what can we surmise from the chart? Let's take a look:
It looks like the stock has found a new base to jump off from (see Blue area), so we could (not a recommendation) buy here, and set a 1% Swing trade trailing stop and see how high this could go.
Let's look at yesterday's suggestion, ZHNE. I stated that there was heavy insider buying, and a classic three Green Arrow signal. I got in today, so let's see what happened:
BIG pop relatively speaking. Sure, it was only $0.16, but on a $1.33 stock, that represents a 12% move. That's pretty big, and look at the volume the last two days. The stock also smashed through the 200 DMA which now becomes support. Something BIG seems ready to happen here, hopefully something GOOD!
A couple of more plays I am interested in:
BBY
SBUX
Until next time...Happy Trading!
CCJ is "En Fuego," the stock is just a machine right now. Uranium prices are soaring and CCJ is benefitting nicely. So today, the stock broke through the Ascending Channel I drew so now what can we surmise from the chart? Let's take a look:
It looks like the stock has found a new base to jump off from (see Blue area), so we could (not a recommendation) buy here, and set a 1% Swing trade trailing stop and see how high this could go.
Let's look at yesterday's suggestion, ZHNE. I stated that there was heavy insider buying, and a classic three Green Arrow signal. I got in today, so let's see what happened:
BIG pop relatively speaking. Sure, it was only $0.16, but on a $1.33 stock, that represents a 12% move. That's pretty big, and look at the volume the last two days. The stock also smashed through the 200 DMA which now becomes support. Something BIG seems ready to happen here, hopefully something GOOD!
A couple of more plays I am interested in:
BBY
SBUX
Until next time...Happy Trading!
Sunday, April 15, 2007
In the ZHONE and CCJ Update
Hey Gang:
A few days ago I mentioned CCJ as a play that was following a chart pattern I set up to try and predict its movement. I even showed a Bearish Engulfing Pattern as possible evidence that a downturn may be imminent, along with the STO and MACD. Well, after two somewhat blase days, the stock popped up almost $2 on some good news from the Canadian government, as well as some pumping on CNBC. Had I been in a short term Bearish play (which I was not since I don't play the bearish side of a swing trade when the predominent trend is Bullish), I would be getting near my stop-loss of 1% above the high on 4/10/2007 which is $47.97. Here is the chart:
The trade still hasn't broken above the upper resistance line yet, and the stock is still oversold with a falling MACD, so let's see how it plays out. Ideally, I want to enter this trade where I have placed a green oval, which is at the channel support line.
Into the ZHONE
Every once in awhile when I peruse the Yahoo! Finance message boards, I come across a suggestion that piques my interest. On Friday, someone mentioned Zhone (ZHNE), a company I had never heard of. The post mentioned that there was significant insider buying, and the stock made a significant move, so I checked it out and here's what I found:
So here is a CLASSIC INVESTools (technical) entry signal IMHO, three (3) Green Arrows on BIG volume on an uptrending stock. By the way, did you notice the stock price of $1.30? Even better, this is NOT an OTC stock or one of those "Pump & Dump" spam mail stocks you get. This is a NASDAQ listed company, so to me that says "legit." How about the insider buying? Check this out:
So as you can see, there has been some decent amount of insider buying recently which may bode well for the future. If the top brass is buying stock on the open market, they obviously believe something good is going to happen in the future...they are betting their own money on it.
Just something to consider.
Happy Trading!
A few days ago I mentioned CCJ as a play that was following a chart pattern I set up to try and predict its movement. I even showed a Bearish Engulfing Pattern as possible evidence that a downturn may be imminent, along with the STO and MACD. Well, after two somewhat blase days, the stock popped up almost $2 on some good news from the Canadian government, as well as some pumping on CNBC. Had I been in a short term Bearish play (which I was not since I don't play the bearish side of a swing trade when the predominent trend is Bullish), I would be getting near my stop-loss of 1% above the high on 4/10/2007 which is $47.97. Here is the chart:
The trade still hasn't broken above the upper resistance line yet, and the stock is still oversold with a falling MACD, so let's see how it plays out. Ideally, I want to enter this trade where I have placed a green oval, which is at the channel support line.Into the ZHONE
Every once in awhile when I peruse the Yahoo! Finance message boards, I come across a suggestion that piques my interest. On Friday, someone mentioned Zhone (ZHNE), a company I had never heard of. The post mentioned that there was significant insider buying, and the stock made a significant move, so I checked it out and here's what I found:
So here is a CLASSIC INVESTools (technical) entry signal IMHO, three (3) Green Arrows on BIG volume on an uptrending stock. By the way, did you notice the stock price of $1.30? Even better, this is NOT an OTC stock or one of those "Pump & Dump" spam mail stocks you get. This is a NASDAQ listed company, so to me that says "legit." How about the insider buying? Check this out:
So as you can see, there has been some decent amount of insider buying recently which may bode well for the future. If the top brass is buying stock on the open market, they obviously believe something good is going to happen in the future...they are betting their own money on it.Just something to consider.
Happy Trading!
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