A couple weeks ago I mentioned that a reversal was imminent. Because it took so long to form I suspect that anyone who reads this blog thinks my prognostication skills are a bit week. I am not going to argue that. Prognostication is not omniscient foresight. As time goes by the forecast changes.
So here is the forecast now. The imminent reversal is happening now. But this is happening not on bad news but on good news. New home sales are rising for the first time in months and consumer spending is higher than expected. Some companies are even posting profits that are significantly better than those from this time last year. So why is this reversal happening? I have two words for you. Profit taking.
After all these months of investing in these companies. The investors are selling to get their ROI. But what does this mean for the market? It simply means this. What I expected as a significant reversal may not be anything more than a strong pull back. I am suspecting a 'ball-park' pull back to 8800 for the Dow, 1850 for the NASDAQ, and 950 for the S&P 500.
I am currently still holding on to a stock position as well as a put position on Nova Gold (NG). The stock is still profitable and the put is in break-even territory for now. We will see how that goes.
That is my opinion, you can take it or leave it.
Disclaimer: See bottom of page.
Wednesday, July 29, 2009
Friday, July 17, 2009
Imminent Reversal
So it has been a couple of weeks and I have news to report. There is an imminent reversal about to happen. And I apologize about not mentioning this earlier, but I do get busy, as an example to a family member about the power of options I bought an option position on FPL. I will talk about that also.
So what we have is that the Stochastic and MACD daily technical indicators for the major indices are in the over bought range. But if we look at the same indicators for the weekly chart we see that they are declining from the over bought range. What can be expected from this is that the indices, and any stocks with similar situations, will stall out and test recent bottoms or blow down below them for a little bit.
Now as I have been testing my programming skills in creating a program that predicts these changes in movement and provides suggestions based on an investors risk level I have been introducing what I know and learn to family and friends. Well a discussion about stocks started up and I showed this family member NG. and how much profit it has made so far. He was impressed and so I showed him FPL since it it one of the stocks I regularly watch, and it had a triple threat signal for a bull trader. (Candle stick, Stochastic cross, MACD cross) With that I showed him options and what the power in that is. I actually bought the FPL IK option earlier that day. I then introduced him to paper trading. So he is pumped.
Now for the bad news. I saw that FPL was slowing down yesterday and I wanted to protect some of the profit I had made in the past few days. So I set a stop at 3.20 per contract-share and it got taken out at 3.00 per contract-share. Since I got it at 2.75 per contract-share my profit is .25 per contract-share or 9%. What I haven't mentioned, and I won't, is how many I bought. Lets just say the minimum is 100 shares per contract. So you can multiply the numbers mentioned by any number of hundreds.
What I am looking at now is waiting a couple of weeks to see if the prediction I mentioned at the beginning of this article comes to light as I am expecting.
That is my opinion, you can take it or leave it.
Disclaimer: See bottom of page.
So what we have is that the Stochastic and MACD daily technical indicators for the major indices are in the over bought range. But if we look at the same indicators for the weekly chart we see that they are declining from the over bought range. What can be expected from this is that the indices, and any stocks with similar situations, will stall out and test recent bottoms or blow down below them for a little bit.
Now as I have been testing my programming skills in creating a program that predicts these changes in movement and provides suggestions based on an investors risk level I have been introducing what I know and learn to family and friends. Well a discussion about stocks started up and I showed this family member NG. and how much profit it has made so far. He was impressed and so I showed him FPL since it it one of the stocks I regularly watch, and it had a triple threat signal for a bull trader. (Candle stick, Stochastic cross, MACD cross) With that I showed him options and what the power in that is. I actually bought the FPL IK option earlier that day. I then introduced him to paper trading. So he is pumped.
Now for the bad news. I saw that FPL was slowing down yesterday and I wanted to protect some of the profit I had made in the past few days. So I set a stop at 3.20 per contract-share and it got taken out at 3.00 per contract-share. Since I got it at 2.75 per contract-share my profit is .25 per contract-share or 9%. What I haven't mentioned, and I won't, is how many I bought. Lets just say the minimum is 100 shares per contract. So you can multiply the numbers mentioned by any number of hundreds.
What I am looking at now is waiting a couple of weeks to see if the prediction I mentioned at the beginning of this article comes to light as I am expecting.
That is my opinion, you can take it or leave it.
Disclaimer: See bottom of page.
Wednesday, July 8, 2009
Back Again, Finally
Hello again. I apologies for not being around. I picked up a contract job for a little while and, circumstances as they were, I just could not get online afterwards to tend to this blog or my own positions as you will soon hear. I am, however, back again.
I am not going to do the market wraps like I have done before. You can go to any number of financial sights to see that. What I am going to do is quickly state the condition of my own accounts.
For instance, those two options I had (CVX QJ and FPL QH) both expired worthless. This is a lesson in setting stops that I still have to perfect (school of hard knocks). My stock in Nova Gold (NG), however, is doing well. The average unit cost of my three positions is $2.95 and today's closing price is $3.82. Including the deduction of commissions, this is 29.4% profit over 5 months.
Now I'll admit, that is not the +/-70% I could of pocketed if I had regularly watched the stock and set my stop to catch the shift of June 3rd. But seriously, show me a bank that is offering that kind of interest and I'll stop blogging.
Right now the market has deflated some so I am analyzing for future positions to make. Keep on the watch for more details.
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.
I am not going to do the market wraps like I have done before. You can go to any number of financial sights to see that. What I am going to do is quickly state the condition of my own accounts.
For instance, those two options I had (CVX QJ and FPL QH) both expired worthless. This is a lesson in setting stops that I still have to perfect (school of hard knocks). My stock in Nova Gold (NG), however, is doing well. The average unit cost of my three positions is $2.95 and today's closing price is $3.82. Including the deduction of commissions, this is 29.4% profit over 5 months.
Now I'll admit, that is not the +/-70% I could of pocketed if I had regularly watched the stock and set my stop to catch the shift of June 3rd. But seriously, show me a bank that is offering that kind of interest and I'll stop blogging.
Right now the market has deflated some so I am analyzing for future positions to make. Keep on the watch for more details.
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.
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