Executed Puts

As expected the bears are coming out, although a bit slower than expected.

Asia:
Nikkei => 7,945.96, -26.21, -0.33%
Hang Seng => 12,833.51, -297.41, -2.26%
Straits Times => 1,596.92, +12.06, +0.76%

Europe:
FTSE => 3,842.85, +25.92, +0.68%
DAX => 4,068.74, +25.28, +0.63%
CAC => 2,791.14, +14.15, +0.51%

U.S.:
Dow => 7,276.94, -123.86, -1.67%
Nasdaq => 1,457.27, -26.21, -1.77%
S&P => 768.49, -15.55, -1.98%

Me:
AMD => 2.67, -0.29
AMD PG => 0.46 (Bought to Open @ 0.46)
F => 2.75, +0.24
F PG => 0.65, -0.10 (Bought to Open @ 0.75)
FPL DI => 5.40, -0.26
NG => 2.36, -0.22

And I think the wise move is to go with the trend. But is it really time to go with the bears on this one? Some would say that waiting is better, just to make sure. So let me explain why I think it is time.

All the indices put in another bear day and the pass three days show a very obvious pivot. We also have the RSI declining to or below the 50 mark. Usually waiting for another bear day is recommended so that we can be sure it is a pivot and that the RSI can fall below 50, but I am rather certain about this move.

As for the indicators, for all three indices, the stochastic has leveled off at the overbought level. This gives rise to the opinion that investors are going to start selling to get their profits. We also have the MACD doing the same thing after a long uninterrupted climb. Usually solid climbs are followed by solid declines for a short period of time, but it could be longer.

So taking that set of information into consideration I looked at a few of the stocks that I like for puts. We have Advance Micro Devices (AMD) and Ford (F). AMD reflects the broad market exactly, so I am not going to explain myself on that one. However, I probably should explain myself on Ford.

Ford did pivot, but the RSI is actually still climbing and is way up at 74.58. The stochastic indicator is overbought and leveling off, but the MACD has yet to turn, although it has run up for a while. So there is no 100% certainty that Ford will go down from here on out, it is more of a 75% certainty that it will continue to decline. Probably not as forcefully as I believe AMD will, but significant enough to make a profit.

That is my opinion, you can take it or leave it.

Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.