Thursday, August 31, 2006
All that glitters is GLG!!!
Well, it looks like a GOLDEN day for my GLG play, the stock is being bought out by Goldcorp (GG) for about $51/share. Since I bought a $35 call, and the stock should be around $50, that gives me $15 of intrinsic value, which means I am going to be a VERY happy camper today! It will definitely be a 100%+ ROI which is perfect!
Wednesday, August 30, 2006
Waiting on Tuesday
Well, I am not going to do anything until Tuesday of next week when the Fund Managers get back from their summer/Labor Day vacations.
In the meantime, I will have a "shopping list" of plays I will be looking out for next week. When I find anything, I'll be sure to share.
In the meantime, I will have a "shopping list" of plays I will be looking out for next week. When I find anything, I'll be sure to share.
Monday, August 28, 2006
A CVS Bounce
Well, one of my recent successes looks to be ready for its next run, CVS. The stock has bounced off its mid-term diagonal support, and looks like it may have $2.50 of running room.
The Boys of Summer
I expect this week to be fairly light since Labor Day is this weekend, which will be time for the Fund Managers to get in their last hurrah before dragging their butts back to Wall Street on Tuesday. That will make me happy because the last couple of months have been rough with volume and no clear direction. Time for the "Boys of Summer" to start earning their fat paychecks again
Meet "Trader Tim"
If you have not already done so, I highly recommend the blog "Trader Tim." Tim Knight, the blog's author was the creator of Prophet.net, the interactive chart software that INVESTools uses. It is also a stand alone product as well. Anyway, Tim is a total "Bear" which means he LOVES the downside of the market. Why is this important? Well, many people have a psychological problem with being Bearish because it seems "un-American." This is because being bearish means you want companies NOT to do well, thus making their prices go down. Some people just can't do that. I, for one have no problem with that since I am neither a Bear, nor a Bull, I will make money either way.
Why is Tim's blog important for "young" traders? He offers some excellent market analysis and technicals using his software and gives his opinions on things. I have made some good money off some of his recommendations (do your own due diligence), and it also helps you build your technical skills. I visit his site religiously every night as part of my daily routine. Maybe you have your own favorite market blogger?
The Boys of Summer
I expect this week to be fairly light since Labor Day is this weekend, which will be time for the Fund Managers to get in their last hurrah before dragging their butts back to Wall Street on Tuesday. That will make me happy because the last couple of months have been rough with volume and no clear direction. Time for the "Boys of Summer" to start earning their fat paychecks again
Meet "Trader Tim"
If you have not already done so, I highly recommend the blog "Trader Tim." Tim Knight, the blog's author was the creator of Prophet.net, the interactive chart software that INVESTools uses. It is also a stand alone product as well. Anyway, Tim is a total "Bear" which means he LOVES the downside of the market. Why is this important? Well, many people have a psychological problem with being Bearish because it seems "un-American." This is because being bearish means you want companies NOT to do well, thus making their prices go down. Some people just can't do that. I, for one have no problem with that since I am neither a Bear, nor a Bull, I will make money either way.
Why is Tim's blog important for "young" traders? He offers some excellent market analysis and technicals using his software and gives his opinions on things. I have made some good money off some of his recommendations (do your own due diligence), and it also helps you build your technical skills. I visit his site religiously every night as part of my daily routine. Maybe you have your own favorite market blogger?
Brewing storms – Iran and “Ernesto”
Well, it’s Monday, one step closer to Labor Day weekend, and one step closer to normal trading volume, hooray!
On the horizon are two storms developing, the “storm to be named later, Ernesto” which is churning and bubbling near the Windward islands, and everyone’s FAVORITE religious fanatics, the Iranians (they sure put the FUN in Religious FUNdamentalism). What will be interesting is their effect on oil prices in the coming days. I suspect that since Ernesto is not expected to hit the Gulf, then oil prices and oil stocks may fall off for a bit. The Iranian effect will become very, very interesting in the next few days since the UN resolution deadline is looming this week.
There goes WFMI
Well, WFMI spiked .80 at the open and took out my stop loss (30%), darn. It looks like the stock may have found support at $52.25, which was the bottom of the GAP channel formed on 8/1. The real bummer is, right after the stock spiked, it plunged down to -.24, which means I was taken out prematurely…possibly. The MACD and STO look like they may be reversing, so perhaps WFMI found a bottom after all? We’ll see.
Take a RATE hike
I pulled the plug on RATE (12% profit) because the light volume was beginning to move this stock upwards, and I did not want to lose the opportunity to keep this profitable, so I got out and took my money.
The Ernesto effect
Well, XTO had a very good Friday and FTO came down a bit. They are both where they should be in relationship to the trade technicals so I am still in good shape. Having said that, over the weekend the projected path veered away from the central Gulf, so it will have some effect, but since these are NOV trades, there is still plenty of time for future “storm effect.
On the horizon are two storms developing, the “storm to be named later, Ernesto” which is churning and bubbling near the Windward islands, and everyone’s FAVORITE religious fanatics, the Iranians (they sure put the FUN in Religious FUNdamentalism). What will be interesting is their effect on oil prices in the coming days. I suspect that since Ernesto is not expected to hit the Gulf, then oil prices and oil stocks may fall off for a bit. The Iranian effect will become very, very interesting in the next few days since the UN resolution deadline is looming this week.
There goes WFMI
Well, WFMI spiked .80 at the open and took out my stop loss (30%), darn. It looks like the stock may have found support at $52.25, which was the bottom of the GAP channel formed on 8/1. The real bummer is, right after the stock spiked, it plunged down to -.24, which means I was taken out prematurely…possibly. The MACD and STO look like they may be reversing, so perhaps WFMI found a bottom after all? We’ll see.
Take a RATE hike
I pulled the plug on RATE (12% profit) because the light volume was beginning to move this stock upwards, and I did not want to lose the opportunity to keep this profitable, so I got out and took my money.
The Ernesto effect
Well, XTO had a very good Friday and FTO came down a bit. They are both where they should be in relationship to the trade technicals so I am still in good shape. Having said that, over the weekend the projected path veered away from the central Gulf, so it will have some effect, but since these are NOV trades, there is still plenty of time for future “storm effect.
Thursday, August 24, 2006
S.H.I.T. Day
“So Happy It’s Thursday.” Kind of an uneventful start to the day, nothing of mine is screaming profits or losses so it’s just “ho hum.”
More housing woes
More bad news for the housing sector, inventories are up, sales are down. I am hoping this news is good for my RATE Put, since bad housing numbers should reflect in the lending sector, “Pin action” as Cramer would put it. We’ll see if I can get some more Mo behind RATE. Right now, the stock is down .12.
Yaaaaaaaaaaaaaawn!
Man, the market seems like it is on a snail’s pace today. My father believes that it will be this way until after Labor Day when all the Fund Managers come back from their looooong summer hibernation in the Hamptons. I, for one, look forward to the Fall trading season where there should be some direction and some volume.
Is there anybody out there?
Man, there is jus NO volume right now. Today was like watching paint dry, sheesh. Well, I am keeping a very keen eye out on WFMI which went up $1.36 on weak, weak volume. I guess some people have nothing better to do with their time ‘cept screw with my trades. The stock is still within its trading pattern, so I am not bailing yet, but it is getting close.
GLG is backing away from the neckline on my Ascending Triangle pattern which I anticipated may happen. Obviously I would have preferred a breakout, but it looks like with such light volume, it ain’t gonna happen on this run. Oh well, there always the next run up.
Happy Trading!
More housing woes
More bad news for the housing sector, inventories are up, sales are down. I am hoping this news is good for my RATE Put, since bad housing numbers should reflect in the lending sector, “Pin action” as Cramer would put it. We’ll see if I can get some more Mo behind RATE. Right now, the stock is down .12.
Yaaaaaaaaaaaaaawn!
Man, the market seems like it is on a snail’s pace today. My father believes that it will be this way until after Labor Day when all the Fund Managers come back from their looooong summer hibernation in the Hamptons. I, for one, look forward to the Fall trading season where there should be some direction and some volume.
Is there anybody out there?
Man, there is jus NO volume right now. Today was like watching paint dry, sheesh. Well, I am keeping a very keen eye out on WFMI which went up $1.36 on weak, weak volume. I guess some people have nothing better to do with their time ‘cept screw with my trades. The stock is still within its trading pattern, so I am not bailing yet, but it is getting close.
GLG is backing away from the neckline on my Ascending Triangle pattern which I anticipated may happen. Obviously I would have preferred a breakout, but it looks like with such light volume, it ain’t gonna happen on this run. Oh well, there always the next run up.
Happy Trading!
Wednesday, August 23, 2006
Hump Day
So I am mulling over which stocks to play from my list last night and confirmed WFMI and RATE as valid PUT plays through consulting with an INVESTools coach. I got in the Nov $55 on WFMI and the Nov $35 on RATE.
Stop loss & protecting profits vs. Opportunity costs
Well, I am in a quandary in protecting profits vs. opportunity costs. What I mean is, I had a wonderful play on FCX the last few days that was up almost $1,500 at one point just cruising along. So, in order to capture profits, I moved my stop-loss to hold onto at least $700. Well, low and behold, FCX drops over .90 yesterday and takes out my play for the aforementioned profit. Of course, my Murphy law always said that a trade always temporarily goes against me then reverses to piss me off, which is exactly what has happened. FCX ended up only down .25 yesterday, and today, is already up .78, which means I would have still been in the game had my stop loss not been so “close.” So what to do? Do I leave my stop loss back really far so as not to be taken out prematurely? Or do I continue to use my stop loss to protect profits and risk being taken out before my pattern plays have fully evolved? Perhaps I need to look at the “big picture” which is what type of play I am using, and base my stop loss triggers on that? Ideally, I would like to stay $1 away from the option’s Bid price as a buffer, so maybe I will try that?
Nuclear Iran
Scary thought huh? Those haters of “the Great Satan” in possession of a nuclear weapon is a nightmare. Why? Because those a-holes don’t need a reason to set it off, it would be “Allah’s will,” or some crap like that. It will be very interesting to see what happens the next few weeks if Iran rejects the UN resolution and continues on its evil ways. If it comes down to a conflict, and we certainly have the assets in the region to start some shit, oil prices would spike faster than you could say “Ayatollah.” Maybe gold prices would soar too? That would be nice for my GLG play.
Mid-summer blahs
The market this time of the year is very tough to read. I have done better this year, then my first summer last year when I got absolutely crushed! The volume is very light which can be a problem since small volume days can move a stock price a substantial amount killing some good trades along the way. I have learned that a couple of times this summer, but not to the painful extent of last year. I have played savvier with my exit points, not willing to get out at when a certain loss level is reached, but if certain support and resistance levels are broken. THAT, along with strict money management is really the key to success. I wish I had really understood that more than anything else the past year (my very first as a trader).
Looking in on GLG
Well, GLG looks like it may not have enough juice to break out of its Ascending Triangle pattern on this run, but Gold is a funny thing, it could break out at any time. It is still trading within the triangle pattern and I felt it may have one more pull-back before its breakout run. Ideally, I’d like the breakout to occur now, but I am comfortable with my position.
Maybe I am getting smarter after all?
Well, FCX which I mentioned earlier is now DOWN .26, a $1 change from the high, so maybe taking my profits out earlier was the right thing to do? I had a similar thing happen with BUCY in which I was up over $3,000, only to have the stock come down and take me out for a $2,300 profit. At the time, I was upset because the stock went up the very next day. HOWEVER, looking back on it now, the stock is back to where it was when I bought it, meaning I would have broken even at this point, instead of being $2,300 ahead. Perhaps it is best to capture your profits while you got them?!?!
So how did it end?
Well, of my two plays today, RATE did very, very nicely as I am up $700. As for WFMI, just about even, which means I at least gained the spread.
GLG, MON and XTO were all down a bit but all are within the confines of the predicted trading pattern of the play, so I will still be staying the course for now.
I’ll see if anything looks interesting to play tomorrow.
Happy Trading!
Stop loss & protecting profits vs. Opportunity costs
Well, I am in a quandary in protecting profits vs. opportunity costs. What I mean is, I had a wonderful play on FCX the last few days that was up almost $1,500 at one point just cruising along. So, in order to capture profits, I moved my stop-loss to hold onto at least $700. Well, low and behold, FCX drops over .90 yesterday and takes out my play for the aforementioned profit. Of course, my Murphy law always said that a trade always temporarily goes against me then reverses to piss me off, which is exactly what has happened. FCX ended up only down .25 yesterday, and today, is already up .78, which means I would have still been in the game had my stop loss not been so “close.” So what to do? Do I leave my stop loss back really far so as not to be taken out prematurely? Or do I continue to use my stop loss to protect profits and risk being taken out before my pattern plays have fully evolved? Perhaps I need to look at the “big picture” which is what type of play I am using, and base my stop loss triggers on that? Ideally, I would like to stay $1 away from the option’s Bid price as a buffer, so maybe I will try that?
Nuclear Iran
Scary thought huh? Those haters of “the Great Satan” in possession of a nuclear weapon is a nightmare. Why? Because those a-holes don’t need a reason to set it off, it would be “Allah’s will,” or some crap like that. It will be very interesting to see what happens the next few weeks if Iran rejects the UN resolution and continues on its evil ways. If it comes down to a conflict, and we certainly have the assets in the region to start some shit, oil prices would spike faster than you could say “Ayatollah.” Maybe gold prices would soar too? That would be nice for my GLG play.
Mid-summer blahs
The market this time of the year is very tough to read. I have done better this year, then my first summer last year when I got absolutely crushed! The volume is very light which can be a problem since small volume days can move a stock price a substantial amount killing some good trades along the way. I have learned that a couple of times this summer, but not to the painful extent of last year. I have played savvier with my exit points, not willing to get out at when a certain loss level is reached, but if certain support and resistance levels are broken. THAT, along with strict money management is really the key to success. I wish I had really understood that more than anything else the past year (my very first as a trader).
Looking in on GLG
Well, GLG looks like it may not have enough juice to break out of its Ascending Triangle pattern on this run, but Gold is a funny thing, it could break out at any time. It is still trading within the triangle pattern and I felt it may have one more pull-back before its breakout run. Ideally, I’d like the breakout to occur now, but I am comfortable with my position.
Maybe I am getting smarter after all?
Well, FCX which I mentioned earlier is now DOWN .26, a $1 change from the high, so maybe taking my profits out earlier was the right thing to do? I had a similar thing happen with BUCY in which I was up over $3,000, only to have the stock come down and take me out for a $2,300 profit. At the time, I was upset because the stock went up the very next day. HOWEVER, looking back on it now, the stock is back to where it was when I bought it, meaning I would have broken even at this point, instead of being $2,300 ahead. Perhaps it is best to capture your profits while you got them?!?!
So how did it end?
Well, of my two plays today, RATE did very, very nicely as I am up $700. As for WFMI, just about even, which means I at least gained the spread.
GLG, MON and XTO were all down a bit but all are within the confines of the predicted trading pattern of the play, so I will still be staying the course for now.
I’ll see if anything looks interesting to play tomorrow.
Happy Trading!
Tuesday, August 22, 2006
Looking ahead...
Well, one must always be on the lookout for new trading ideas. After reviewing my INVESTools search tools, I have come up with the following potential plays:
Calls
Calls
- CG
- CHK
- ESV
- SII
- VTS
Puts
- CAI
- CRR
- FDX
- GLW
- JOYG
- LCAV
- LSS
- PNRA
- RATE
- SFG
- THE
- WFMI
Now, I have not cleared these through the INVESTools hotline, which I ALWAYS do before placing a trade. That being said, I may have cut down some research time for you. Draw your own conclusions and trade at your own risk.
Happy trading!
NEU Head & Shoulders
NEU
My buddy A.C. came across this interesting play today, NEU. It is a upside down "Head & Shoulders" pattern that looks like it may be close to breaking out for a tremendous $23 upside! If you are not familiar with what a H&S pattern looks like, I'll try to describe it for you.
A Upside Down Head & Shoulders pattern consists of three (3) points, two lower ones sandwiching an even lower one in the middle. The neckline begins where the first downturn to the first low point begins. In the case of NEU, on 5/9/06. The first shoulder occurs on 5/22, followed by the head on 6/14 then the second shoulder on 7/14. The theory is, if the stock retraces back to the neckline and breaks it, in this case at $62.35 (the high of the day on 5/9), then the stock will probably ("probably" is ALWAYS the operative term when dealing with trading, NOTHING is certain)move the same height as the distance between the neckline ($62.35) and the top (or bottom as it is here) of the head ($37.65)or $23.70.
Using the same time frame of about a 4 month pattern formation gives me a December/January time frame for my option when it is ready to go.
Patience is important because the pattern has not signaled an entry yet, so what am I waiting for? Well, to start I need the stock to close above the neckline. After that occurs, typically, the stock will run away from the neckline then retest it. That is what I am waiting for, the stock to move past $62.35, then come back down to it without breaking through, then once my MACD and STO show strength, and the stock is ready to continue its Bullish move, then I will buy my Call for a 4 month pattern run.
Keep an eye on this one!
My buddy A.C. came across this interesting play today, NEU. It is a upside down "Head & Shoulders" pattern that looks like it may be close to breaking out for a tremendous $23 upside! If you are not familiar with what a H&S pattern looks like, I'll try to describe it for you.
A Upside Down Head & Shoulders pattern consists of three (3) points, two lower ones sandwiching an even lower one in the middle. The neckline begins where the first downturn to the first low point begins. In the case of NEU, on 5/9/06. The first shoulder occurs on 5/22, followed by the head on 6/14 then the second shoulder on 7/14. The theory is, if the stock retraces back to the neckline and breaks it, in this case at $62.35 (the high of the day on 5/9), then the stock will probably ("probably" is ALWAYS the operative term when dealing with trading, NOTHING is certain)move the same height as the distance between the neckline ($62.35) and the top (or bottom as it is here) of the head ($37.65)or $23.70.
Using the same time frame of about a 4 month pattern formation gives me a December/January time frame for my option when it is ready to go.
Patience is important because the pattern has not signaled an entry yet, so what am I waiting for? Well, to start I need the stock to close above the neckline. After that occurs, typically, the stock will run away from the neckline then retest it. That is what I am waiting for, the stock to move past $62.35, then come back down to it without breaking through, then once my MACD and STO show strength, and the stock is ready to continue its Bullish move, then I will buy my Call for a 4 month pattern run.
Keep an eye on this one!
Welcome to my Blog!
Welcome to my blog, I hope you find it to be interesting, humorous and somewhat informative. I intend to use this format to take my readers through the day-to-day events of my Day Trading. I will be sharing my investment plays (these are NOT recommendations - trade at your own risk), with insight to what I was thinking when I made the plays.
Be sure to make your own comments on trades you are making, as well as any general comments about the market in general, economic conditions, college football games, etc. I appreciate your feedback!
In the spirit of full disclosure, I am an INVESTools PhD. student, so this is where I received my skills training. I know there are other methods out there, "Teach Me to Trade", etc. and I am not advocating one is better than the other. Other INVESTools traders will understand some of my jargon better than other perhaps, but bear with me.
Happy Trading!
Be sure to make your own comments on trades you are making, as well as any general comments about the market in general, economic conditions, college football games, etc. I appreciate your feedback!
In the spirit of full disclosure, I am an INVESTools PhD. student, so this is where I received my skills training. I know there are other methods out there, "Teach Me to Trade", etc. and I am not advocating one is better than the other. Other INVESTools traders will understand some of my jargon better than other perhaps, but bear with me.
Happy Trading!
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