Some ideas...

Well, I entered into three new plays today based upon some Technical and Fundamental Analysis. Each of them are in nice uptrends and were close to the bottom supports of their channels.

To see a chart, click on it to enlarge, then use your "back" or "refresh" button on your browser to return to the blog.

CSH



INTU


SAY
Happy Trading!

Monday blues...

Well, nothing today jumped out at me as a potential play. The markets were mixed and for some reason, I did not see much mention of a revised GDP number reflecting a statistical anomoly from last Friday. My friends over at TraderTim.blogspot.com brought this to my attention (by the way, TraderTim's site is one of the BEST out there for Technical Anlaysis, and since he is a UberBear, it is nice to have someone who plays the "darkside" of the market).

With mid-term elections looming next week, the market may act a little crazy. In my opinion, if the Democrats take over both the House and Senate, I believe the markets will fall. Why? Well, the Dems would want to raise the minimum wage, cut some tax breaks, tax Big Oil uber-profits, and do some other anti-business measure that will harm the economy. Plus, having a Democratic Congress with a Republican President is like trying to mix oil and water...it doesn't work.

Should the economy slow and head into recession, a stock you may want to consider is CSH:



This stock has been on a tear lately and it will continue to fly into a recession because they are Pawn Shops. So when folks are struggling financially, this could be a place they turn to.

Take a bite in CROX

CROX
This stock has a very nice bounce on Thursday with the STO and MACD lined up nicely for a bullish run. Caveat: earnings are 11/6.

AMT
Another bullish stock on the move on a bounce on its 23.6% Fibonacci line. Not great fundamentally (3/1, 2/0), but the ACC is high at 74 meaning institutions are hot and heavy in this stock. Caveat: earnings 11/6

ANST

Another Bullish stock that has bounced. Fundamentally sound at 7/1, 2/0 (CNBS but 3.75 Financials), ACCis 63 which is good too. Caveat: earnings 11/13

More stuff later!

Happy Trading!

CRRazy earnings season

I have come to learn over my 15 months of trading that earnings are always a crapshoot. Many times I read "Blowout earnings" or "Record Earnings" only to see a stock plummet. Well, yesterday I suggested CRR as a potential play, but gave the caveat that earnings were today. Well, I hope you heeded my warning as the stock has dropped over $2.50 today. Just goes to show that buying into earnings is ALWAYS a "buyer beware" situation.

Another idea...BLUD (remember, click on the picture to enlarge it, then "back" on your browser to return to the blog)

This is a SWEET looking chart as far as I am concerned. As an INVESTools student, this baby has all the elements of a "buy" signal. Uptrending stock, breaking resistance on good volume, MACD bottomed out and heading bullish, and STO bottoming out and heading bullish. The fundamentals are solid too (6/2, 2/0).

I have no freaking clue where BLUD can go, but I will be playing trailing stops until it takes me out. Hopefully, it will be a GREAT ride to the top!


Happy Trading!

Some trading ideas...

Okay Traders, here are some trading ideas for you. Remember, you need to decide for yourselves if these fit your trading rules and profiles...buyer beware!

CRR

Stock is making a nice bounce off diagonal support. This higher low may indicate a trend reversal. Caveat: Earnings are 10/26.

LYO

Stock is making a nice bouce off diagonal support and has a nice uptrend going. Caveat: earnings are 10/26.

Remember, you can always click on a picture to enlarge it, then use your "back" button on your browser to retrun to the blog.

Happy Trading!

unEXPected Surprise

Today was a nice day in that Eagle Materials (EXP) which I bought yesterday jumped a whopping $2.59 on great volume. This could either be the start of a big retrace since the stock has been beaten up so much, or a short squeeze. No matter, i am gonna work this profit for as much as I can.

AKAM was another great bounce on a stock I bought yesterday. I sold a NOV $50 covered call for $2.30, so as long as this baby is between $50 and $52.30 by mid November, I'll be a happy camper.

I'll see if there are any more plays ripe for the picking and let y'all know.

By the way, if you click on the pictures, they'll open up much bigger (and easier to read), then just click on the "back" button of your browser to return to the blog.

Happy Trading!

Back Into the Fray

Well Traders, it has been a month since my last post, and I have been waiting on the sidelines due to the Bullish nature of the market, and with so many of the stocks I am interested in being overbought.

I did enter into a few stocks this week, ADBE, AKAM, BBBY, and EXP.

My first Iron Condor was not as successful as I had hoped, primarily because my initial trade was too close for such a strong uptrending market. I did roll out once but the $NDX kept chasing my tail. I learned a great deal from that first trade, primarily, to make much wider spreads (in the 250-300 point range on the $NDX), especially in a "hot" market. Sure, the returns won't be as grand, but they should be consistent, and without much need to ever roll out. I also moved my roll points out to 40 for greater than 15 days, and 25 for less than 15 days (from 35 and 20 respectfully). The most impirtant thing I learned was an amazing discovery I wanted to share.


I did a hypothetical analysis of a $100,000 account that played a very conservative Iron Condor every month. Essentially a 275 point spread with returns of about $3,500/month. The initial play was 10/10/10/10 contracts until the returns added $25,000 to the account. At that point I added 5 shares to the contracts for a 15/15/15/15 play (which is $5,250/month) to see what would happen. Well, if you keep adding 5 contracts for every $25,000 added to the account, and this is at 100% success (which is reasonable to me since the spreads are pretty wide), then in theory after only 3 years, 3 months, your account would have over $600,000 in the account and would be gernerating $35,0000/month on 100/100/100/100 contract plays. Now that is some serious income!

Here is the progression:

• 10 contracts = $3,500
  
• 15 contracts = $5,250
  
• 20 contracts = $7,000
  
• 25 contracts = $8,500
  
• 30 contracts = $10,500
  
• 35 contracts = $12,250
  
• 40 contracts = $14,000
  
• 45 contracts = $15,750
  
• 50 contracts = $17,500
  
• 55 contracts = $19,250
  
• 60 contracts = $21,000
  
• 65 contracts = $22,750
  
• 70 contracts = $24,500
  
• 75 contracts = $26,250
  
• 80 contracts = $28,000
  
• 85 contracts = $29,750
  
• 90 contracts = $31,500
  
• 95 contracts = $33,250
  
• 100 contracts = $35,000
  

By the way, the $3,500 initial amount was based on fixed prices, i.e. the middle prices of the options. It could be closer to $4,000 initially if the options could be played to earn that amount. I'll let you know next Friday when I enter into December's Iron Condor. That is another thing I learned, enter your IC the Friday before 6 weeks out and take advantage of the time value before the weekend.

Happy Trading!

Did you miss me?!?!

Okay, so I took a couple of days off to regroup after some setbacks. I have played my very first "Iron Condor" on the $NDX which I am excited about. When I master this technique, I will be able to generate steady income every month with limited risk. If you want to learn more about how to play this, you need to be an INVESTools student. My anticipated income off this trade is almost 5 figures, which when generated every month, will give me well over 40% return over the year. I'll keep you posted.

The Fed speaks today, and everyone expects them to stay status quo and do nothing. This would be quite Bullish and may give early kindling to a 4th quarter Bull rally, which is what I am waiting for...some solid direction in the market.

Meanwhile, oil and natural gas are getting hammered as are other commodities which may make for some very good buying opportunities. If the Fed does keep interest rates stable, even though Housing may have fallen off a cliff, it may also be a good time to get into those as well as Retail.

Cheaper Oil, No Interest Rate Hike = Weight Loss?!?!

So check this out, NTRI, which I made a lot of money on the upside a few months ago has been downtrending recently. The stock was falling away from it diagonal resistance and the MACD and STO looked perfect for a Put yesterday. then today, WHAMMO, a complete 180. The stock is up almost $4.20 today on no news, just speculation I guess that since oil is falling, and the Fed may pause again, that folks will spend money on weight loss products. Funny logic. I got out quick on this cause it smelled fishy and I didn't want to take a bath on this nonsense, so once it pierced the diagonal resistance I line, I said "Aloha."

What the Hell?!?!

Ever think the market is even more confused than you are? Well, check out these two headlines on Yahoo! finance. One says that the market "looked past an unexpected rise in retail sales" and the headline right below it says "Retail Sales Slow." So which is it dumbasses?

Meanwhile, the oil sector continues to get hammered because of what I perceive as an "International Lovefest" since Israel isn't blowing up Hezbollah to Kingdom Come, and Iran is supposedly "playing nice," and Nigeria only had 3 kidnappings this week instead of 4. Meanwhile, there are still hurricanes forming in the Atlantic; Iran, Venezuela, and Nigeria are still hotspots and unstable, and China and India are making cars that I assume the 2 BILLION people that live there (okay, maybe only 400,000,000 will actually drive them) will buy and fuel, the oil "finding" in the Gulf is still years away from being tapped into, and is in the same place that hurricanes love to roam. So what is it? Is the "terror premium" all of a sudden irrelevent because the World is fairly quiet? Look out if we get a very cold winter and a hurricane makes its way into the Gulf (remember, Hurricane season ends in NOV).

I will be very happy once tomorrow is over, the "Witch" will be dead and hopefully we can resume some normalcy.

Happy trading!

Triple Witching Week

Well Traders, it's "Triple Witching Week" which means the markets are even more irrational than usual. Usually, I sit on the sidelines this week because being that it is Options Week, as well as the end of Q3, there is so much happening with the Mutual Funds and Hedge Funds that I let those guys battle it out.

The Dow had a big run up today, but as I looked at the MACD, the peaks have been lower with each higher peak on the daily price charts. This is a called a "divergence" and usually symbolizes a "false rally." So, being that the Dow is getting very close to the all-time high, it could be a predictor of a fall-back...time will tell.

CVS got taken out yesterday when the stock had an ealy morning fall, but I still made a 5o% return on the option after moving the stop-loss up. I'll take 50% returns ALL DAY, EVERY DAY!

JCP has finally got some steam behind it and has had three consecutive up days with decent and increasing volume, so that bodes well for my Call play on the bounce of 9/1. I was concerned when the stock fell back, but it did not break my support line so I stayed the course. Today, I was rewarded with a nice move and a close above the 30 day MA, which is nice as that can act as support now. My 1st target price for the stock is $69.50, which is the neckline for an Ascending Triangle play. Should the stock break that resistance level, I see a $7-$8 move from there. Wouldn't THAT be cool?

Finally, for consideration look at LH. The stock is bouncing off the MA, and the MACD and STO are perfectly positioned for a nice upside move. 1st target for the stock price is $69.25 with a 2nd target of $70.25. If it breaks $70.25, I seesomewhere above $73. Notice the Bollinger Bands are getting close to a nice squeeze which may indicate a substantial breakout.

Happy Trading!

Back into the fray...

Well, last week ended a bit sour. Some of my positions were taken out for some losses based on support/resistance levels being broken. I have set my stop loss exits to be more "aggressive," i.e bailing out earlier when the trades go against me.

NEU is a good example. The stock had broken above a resistance neckline for a Head & Shoulders play that was projected to have a $25 upside. However, the very next day, the stock dropped over $3 at one point, dropping back below the neckline at which point I exited the trade with my preset stop-loss trigger. I always have TWO stop loss triggers set on each trade, a standard 30% loss exit, as well as a support/resistance level trigger that may or may not take me out before the 30% trigger. The 30% trigger is my Max Pain exit, so that is the most I expect to lose on a trade, and the support/resistance trigger may take me out before the 30% loss which is fine too.

I stepped back from trading on Friday since I was taking some hits and to stop from getting "emotional," but I expect to make some trades this week if any present themselves.

I have a very nice trade going with CVS, which I am up over 40% right now. I have moved my stop-loss up to capture 35% returns so I am a happy camper right now. I expect the stock to reach about $36.50-$37 within the next 10 days at which point, if the stock begins to retrace abck to its diagonal support, I'll get out and wait for the stock to retrace to support and get back in again.

Happy trading!

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!

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.

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?

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.

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!

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!

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

• 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!

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!