I am sorry for being a few days late on the weekly report. So lets get right to it.
U.S.
Dow => 8083.38, +65.79
Nasdaq => 1652.54, +30.67
S&P => 856.56, +14.06
Mine
AMD => 3.75, +0.32
F => 4.24, +0.99
NG => 2.92, +0.15
CVX QJ => 0.15, -0.05
FPL QH => 0.15, -0.40
My outlook is that the market is still going down from here. This is because all momentum indicators I watch are still slowing and reversing. I don't want to sound like a broken record so if you want to see what I am looking at that causes me to think that, just read the last two weekly reports. I don't mean to be rude but, seriously, do you want to see the same reasons written over and over again?
Now it looks like my option picks didn't work out very well for me, but I still have a month left, and things are turning in my opinion, I am just going to wait them out.
I have two cover calls that I haven't been posting. One is on AMD and the other is on Ford. They are both ITM so they might be called away from me this Friday since it is option expiration. But I am going to allow it to ride. The option is two expensive for me to buy back but I made enough profit on the stocks to be satisfied with being called away.
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.
Showing posts with label Bear Market Rally. Show all posts
Showing posts with label Bear Market Rally. Show all posts
Monday, April 13, 2009
Saturday, April 4, 2009
Weekly Report
This past week was another bull week. That makes 4 weeks of positive gains in a row. Does this mean that the bear market is over? I don't think so and I will tell you why.
U.S.
Dow => 8017.59, +246.41
Nasdaq => 1621.87, +76.67
S&P => 842.50, +26.56
Mine
AMD => 3.43, +0.06
F => 3.25, +0.41
NG => 2.96, +0.24
CVX QJ => 0.20, -0.35 (Bought To Open @0.55, 03/31/2009)
FPL QH => 0.55, unchanged (Bought To Open @0.55, 03/31/2009)
So Why Is The Bear Market Not Over?
The reason is simple, momentum is still slowing on this bull. The point increases this week are still relatively small. Two of the above closings are still within the resistance ranges I mentioned last week. And, although the Nasdaq moved over the resistance range I mentioned, it only did so by a point value that is marginally greater than the actual margin I mentioned.
All of the other reasons I mentioned last week are still relatively valid for this week, as well. The Stochastic and MACD for all three of the major indices are still overbought. The RSI for all three returned to their levels of last week. In fact they exceeded them, but they lost momentum on the last couple days. Their projection indicates lowering in the near future.
What Is The Opinionated Investor Doing?
Using the information I just mentioned I am definitely not buying Long or Call positions right now. I actually bought a couple Put positions for the time being, specifically, Chevron and FPL (of course).
Why Put positions? Reason number one being that I don't Short stocks. Not my style. Number two, I don't think spring break will be as productive this year as it was last year. Ill effects of the recession. Also, Florida's spring hasn't started out as hot as it usually does and the winter in the Southeast hasn't been that bad, so I perceive the need for these two energy producers to be less than usual, at least at first.
Explaining My Actions
Now I am playing them a little riskier than I normally would. They were bought about two strike prices OTM in higher multiples. There are a few reasons I did this. One, I actually spend less money on them. Two, I make more profit on them as they become closer to ATM and ITM. Three, the time decay is "slightly" slower than if I were ATM or ITM.
The normal and safer strategy is to buy them ATM or 1 strike price ITM. It is safer because you then at least have intrinsic value (the positive difference in value between the strike price you bought and the price the stock is currently). Intrinsic value is the only substantial value that is left right before an option expires. After an option expires, even intrinsic value vanishes. That is why options are never held until expiration.
If I know this then why am I buying OTM options? The reason is because I am consciously betting on my expectation that the stocks will reach, at least, ATM intrinsic value soon. I believe the following week will start off stagnant and then close lower. Maybe, only by a little. Afterwards, there will be further declines and then another rally that will shatter the current resistance level. I expect to be stopped out by the bounce. At which time I will be following up with the purchase of Calls and going Long on stocks that I will sell Calls against.
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.
U.S.
Dow => 8017.59, +246.41
Nasdaq => 1621.87, +76.67
S&P => 842.50, +26.56
Mine
AMD => 3.43, +0.06
F => 3.25, +0.41
NG => 2.96, +0.24
CVX QJ => 0.20, -0.35 (Bought To Open @0.55, 03/31/2009)
FPL QH => 0.55, unchanged (Bought To Open @0.55, 03/31/2009)
So Why Is The Bear Market Not Over?
The reason is simple, momentum is still slowing on this bull. The point increases this week are still relatively small. Two of the above closings are still within the resistance ranges I mentioned last week. And, although the Nasdaq moved over the resistance range I mentioned, it only did so by a point value that is marginally greater than the actual margin I mentioned.
All of the other reasons I mentioned last week are still relatively valid for this week, as well. The Stochastic and MACD for all three of the major indices are still overbought. The RSI for all three returned to their levels of last week. In fact they exceeded them, but they lost momentum on the last couple days. Their projection indicates lowering in the near future.
What Is The Opinionated Investor Doing?
Using the information I just mentioned I am definitely not buying Long or Call positions right now. I actually bought a couple Put positions for the time being, specifically, Chevron and FPL (of course).
Why Put positions? Reason number one being that I don't Short stocks. Not my style. Number two, I don't think spring break will be as productive this year as it was last year. Ill effects of the recession. Also, Florida's spring hasn't started out as hot as it usually does and the winter in the Southeast hasn't been that bad, so I perceive the need for these two energy producers to be less than usual, at least at first.
Explaining My Actions
Now I am playing them a little riskier than I normally would. They were bought about two strike prices OTM in higher multiples. There are a few reasons I did this. One, I actually spend less money on them. Two, I make more profit on them as they become closer to ATM and ITM. Three, the time decay is "slightly" slower than if I were ATM or ITM.
The normal and safer strategy is to buy them ATM or 1 strike price ITM. It is safer because you then at least have intrinsic value (the positive difference in value between the strike price you bought and the price the stock is currently). Intrinsic value is the only substantial value that is left right before an option expires. After an option expires, even intrinsic value vanishes. That is why options are never held until expiration.
If I know this then why am I buying OTM options? The reason is because I am consciously betting on my expectation that the stocks will reach, at least, ATM intrinsic value soon. I believe the following week will start off stagnant and then close lower. Maybe, only by a little. Afterwards, there will be further declines and then another rally that will shatter the current resistance level. I expect to be stopped out by the bounce. At which time I will be following up with the purchase of Calls and going Long on stocks that I will sell Calls against.
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.
Thursday, March 12, 2009
Bear Market Rally Extends for Third Day
Economic bad news continues to come in and the market just shrugs it off. Is the bear market over?
Jobless claims rise as retail sales slip. Here we have another revision to the jobless claim numbers. The total number of claims is now at 5.3 million. This is the sixth time in seven weeks that a new high has been set. More job cuts were anounced.
The Commerce Department said that the retail sails fell by 0.1 percent. This is less than the 0.5 percent that analysts expected. But the government indicated that the January performance was up 1.8 percent, only 1 percent was expected.
We also have news about business inventory. It was reported that it was cut again in January for the fifth straigh time. Yet the market did not responde negatively to this.
What the market did was rise because the news from GM was promissing. GM told the Obama administration that it will not be in need of government aid as soon as they though because their cost cuts are taking hold.
Also, Standard & Poors cut GE's rating to AA but indicated that no further cuts are being considered. Investors were reported to have expected a deeper downgrade. This looked promissing to them. And the market rallied.
Fed reports record fall in household net worth. But that bad news was about the 4th quarter of 2008. I guess it is true that the news gets built into the price. Because these numbers were over two months old. The market completely ignored it. And the market continued to rally.
Asia:
Nikkei => 7,198.25, -177.87, -2.41%
Hang Seng => 12,001.53, +70.87, +0.59%
Straits Times => 1,493.53, -11.98, -0.80%
Europe:
FTSE => 3,712.06, +18.25, +0.49%
DAX => 3,956.22, +42.12, +1.08%
CAC => 2,694.25, +20.05, +0.75%
U.S.:
Dow => 7,170.06, +239.66, +3.46%
Nasdaq => 1,426.10, +54.46, +3.97%
S&P => 750.74, +29.38, +4.07%
My Portfolio:
AMD => 2.40, +0.09
AMD DG => 0.12, unchanged
F => 2.10, +0.14
FPL DI => 2.35, +.025
MIPS => 2.44 +0.07 (Stop @ 2.33, Sold @ 2.44)
NG => 2.48, -0.12
So, what do we have? We have a third day of gains in the market. The second time in three days that the U.S. market put in more than 3% in gains. Is the bear market over? Don't be silly.
Take a look at the three indexes. This isn't the first time that the market has put in repeated gains or has turned upward. For instance, the Dow put in 5 consecutive market days of gains between November 21-28 of 2008, over 1200 points. Yet the following day, gave back 600+ points. So is the bear market over? Not in the least.
The only way we will know if the bear market is over is when there are more positive days with gains averaging higher than the losses of the negative days which should be fewer and in between. When that happens we should see the most recent closing bottom (support) tested and rejected and then the previous ceilings (resistance) tested and blown through to create new supports to be tested and rejected.
At least two of these and we can say yes this was a bottom. But the chances are we will see the past bottoms (Dow 6500, Nasdaq 1260, S&P 675) retested before the ceilings are tested and broken. What I will say is that responsibility is returning to market, and we may see some stagnation until jobless claims slow and more companies report profits. But be prepared to jump off the bull, and onto the bear, at a moments notice.
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.
Jobless claims rise as retail sales slip. Here we have another revision to the jobless claim numbers. The total number of claims is now at 5.3 million. This is the sixth time in seven weeks that a new high has been set. More job cuts were anounced.
The Commerce Department said that the retail sails fell by 0.1 percent. This is less than the 0.5 percent that analysts expected. But the government indicated that the January performance was up 1.8 percent, only 1 percent was expected.
We also have news about business inventory. It was reported that it was cut again in January for the fifth straigh time. Yet the market did not responde negatively to this.
What the market did was rise because the news from GM was promissing. GM told the Obama administration that it will not be in need of government aid as soon as they though because their cost cuts are taking hold.
Also, Standard & Poors cut GE's rating to AA but indicated that no further cuts are being considered. Investors were reported to have expected a deeper downgrade. This looked promissing to them. And the market rallied.
Fed reports record fall in household net worth. But that bad news was about the 4th quarter of 2008. I guess it is true that the news gets built into the price. Because these numbers were over two months old. The market completely ignored it. And the market continued to rally.
Asia:
Nikkei => 7,198.25, -177.87, -2.41%
Hang Seng => 12,001.53, +70.87, +0.59%
Straits Times => 1,493.53, -11.98, -0.80%
Europe:
FTSE => 3,712.06, +18.25, +0.49%
DAX => 3,956.22, +42.12, +1.08%
CAC => 2,694.25, +20.05, +0.75%
U.S.:
Dow => 7,170.06, +239.66, +3.46%
Nasdaq => 1,426.10, +54.46, +3.97%
S&P => 750.74, +29.38, +4.07%
My Portfolio:
AMD => 2.40, +0.09
AMD DG => 0.12, unchanged
F => 2.10, +0.14
FPL DI => 2.35, +.025
MIPS => 2.44 +0.07 (Stop @ 2.33, Sold @ 2.44)
NG => 2.48, -0.12
So, what do we have? We have a third day of gains in the market. The second time in three days that the U.S. market put in more than 3% in gains. Is the bear market over? Don't be silly.
Take a look at the three indexes. This isn't the first time that the market has put in repeated gains or has turned upward. For instance, the Dow put in 5 consecutive market days of gains between November 21-28 of 2008, over 1200 points. Yet the following day, gave back 600+ points. So is the bear market over? Not in the least.
The only way we will know if the bear market is over is when there are more positive days with gains averaging higher than the losses of the negative days which should be fewer and in between. When that happens we should see the most recent closing bottom (support) tested and rejected and then the previous ceilings (resistance) tested and blown through to create new supports to be tested and rejected.
At least two of these and we can say yes this was a bottom. But the chances are we will see the past bottoms (Dow 6500, Nasdaq 1260, S&P 675) retested before the ceilings are tested and broken. What I will say is that responsibility is returning to market, and we may see some stagnation until jobless claims slow and more companies report profits. But be prepared to jump off the bull, and onto the bear, at a moments notice.
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.
Wednesday, March 11, 2009
Wall Street Extends Rally Despite Mid-day Fizzle, "Bearly".
Following the big "blip" on Wall Street yesterday, the international markets followed suite today. But the international rally was incomplete. Although the Asian market and most of Europe ended in the green, the FTSE couldn't sustain the rally and slide back into the red.
Mimicing the FTSE, the second day of U.S. market's rally fizzled out into the red during mid-day trading. Then the Wall Street bulls made a heroic charge in the last two hours of trading to end the day with the major U.S. indecies in the green, although only fractionally.
Asia:
Nikkei => 7,376.12, +321.14, +4.55%
Hang Seng => 11,930.66, +236.61, +2.02%
Straits Times => 1,505.51, +19.76,+1.33%
Europe:
FTSE => 3,693.81, -21.42, -0.58%
DAX => 3,914.10, +27.12, +0.70%
CAC => 2,674.20, +10.52, +0.39%
U.S.:
Dow => 6,930.40, +3.91, +0.06%
Nasdaq => 1,371.64, +13.36, +0.98%
S&P => 721.36, +1.76, +0.24%
Me:
AMD => $2.31, -0.01
AMD DG => $0.12, +0.01
BKC PX => Sold to Close @ $1.45
F => $1.96, +0.04 Bought @ $1.9150
FPL DI => $2.10, +0.25 (Bought to Open @ $1.85)
MIPS => $2.37, +0.01
NG => $2.60, +0.17
My put on BKC got stopped out. However, it looks like BKC ended with a bearish harami, and both the stochastic and MACD turning down from overbought conditions. I might get back into it tomorrow.
I got into F under consideration that it will most likely be the only one of the Big 3 to survive in it's present condition. This time I will not be setting a tight stop on it.
I got into a call option for FPL because mathematically the candlesticks are for a bullish engulfing, however they are not properly positioned. The stochastic and MACD are both extremely oversold and showing signs of turning. So far this position has profited today from an intra-day purchase right after the market open.
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.
Mimicing the FTSE, the second day of U.S. market's rally fizzled out into the red during mid-day trading. Then the Wall Street bulls made a heroic charge in the last two hours of trading to end the day with the major U.S. indecies in the green, although only fractionally.
Asia:
Nikkei => 7,376.12, +321.14, +4.55%
Hang Seng => 11,930.66, +236.61, +2.02%
Straits Times => 1,505.51, +19.76,+1.33%
Europe:
FTSE => 3,693.81, -21.42, -0.58%
DAX => 3,914.10, +27.12, +0.70%
CAC => 2,674.20, +10.52, +0.39%
U.S.:
Dow => 6,930.40, +3.91, +0.06%
Nasdaq => 1,371.64, +13.36, +0.98%
S&P => 721.36, +1.76, +0.24%
Me:
AMD => $2.31, -0.01
AMD DG => $0.12, +0.01
BKC PX => Sold to Close @ $1.45
F => $1.96, +0.04 Bought @ $1.9150
FPL DI => $2.10, +0.25 (Bought to Open @ $1.85)
MIPS => $2.37, +0.01
NG => $2.60, +0.17
My put on BKC got stopped out. However, it looks like BKC ended with a bearish harami, and both the stochastic and MACD turning down from overbought conditions. I might get back into it tomorrow.
I got into F under consideration that it will most likely be the only one of the Big 3 to survive in it's present condition. This time I will not be setting a tight stop on it.
I got into a call option for FPL because mathematically the candlesticks are for a bullish engulfing, however they are not properly positioned. The stochastic and MACD are both extremely oversold and showing signs of turning. So far this position has profited today from an intra-day purchase right after the market open.
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.
Tuesday, March 10, 2009
Powerful Bear Market Rally on Leaked Memo
Wow, what a day. After a seesaw day yesterday, the indecies made a powerful move to the upside today on some very interesting news.
Asia:
Nikkei => 7,054.98, -31.05, -0.44%
Hang Seng => 11,694.05, +349.47, +3.08%
Straits Times => 1,485.75, +28.80, +1.98%
Europe:
FTSE => 3,715.23, +172.83, +4.88%
DAX => 3,886.98, +194.95, +5.28%
CAC => 2,663.68, +144.39, +5.73%
U.S.:
Dow => 6,926.49, +379.44, +5.80%
Nasdaq => 1,358.28, +89.64, +7.07%
S&P => 719.60, +43.07, +6.37%
As for me:
AMD =>$2.32, +0.18
MIPS => $2.36, +0.17
NG => $2.43, -0.11
AMD DG => $0.11, +0.01
BKC PX => $2.15
First, a memo was leaked indicating that Citigroup Inc operated with a profit for both January and February of this year. A surprising announcement considering the billions of dollars in government aid they have taken even up to the end of February.
So, if they truly are making a profit and can afford to give out some sort of bonus' to their Smith Barney fund managers, then why are they being given any aid at all. Why did the U.S. Government have to take a 36% stake in the company. Maybe if they had disclosed that they made been making a profit their stock price would not have dipped below $1.
So, the question arises, is it time to start considering Citigroup Inc. for a stock position? Only if you are a speculator. The stock price is well below all the commonly followed moving-averages (20/50/200), there has been no recognizable or significant candlestick patterns, the RSI is only now moving back up after being beaten below 30 points.
But on the side of speculators, the Chaikin Money Flow indicator is showing that volume is becoming less negative, the Stochastic and MACD indicators show that it is very oversold but turning.
So what am I doing? I am sitting on the side lines. I am going to wait for a pull back and an indication that this pop wasn't a one time thing.
Second, U.S. Rep. Barney Frank, chairman of the House financial services committee, said that the up-tick rule, intended to hinder shorting stocks unless they first moved up in price, may be reinstated within a month from now.
Well it looks like all the discussions on the financial media outlets have been heard. 'Bout time!
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.
Asia:
Nikkei => 7,054.98, -31.05, -0.44%
Hang Seng => 11,694.05, +349.47, +3.08%
Straits Times => 1,485.75, +28.80, +1.98%
Europe:
FTSE => 3,715.23, +172.83, +4.88%
DAX => 3,886.98, +194.95, +5.28%
CAC => 2,663.68, +144.39, +5.73%
U.S.:
Dow => 6,926.49, +379.44, +5.80%
Nasdaq => 1,358.28, +89.64, +7.07%
S&P => 719.60, +43.07, +6.37%
As for me:
AMD =>$2.32, +0.18
MIPS => $2.36, +0.17
NG => $2.43, -0.11
AMD DG => $0.11, +0.01
BKC PX => $2.15
First, a memo was leaked indicating that Citigroup Inc operated with a profit for both January and February of this year. A surprising announcement considering the billions of dollars in government aid they have taken even up to the end of February.
So, if they truly are making a profit and can afford to give out some sort of bonus' to their Smith Barney fund managers, then why are they being given any aid at all. Why did the U.S. Government have to take a 36% stake in the company. Maybe if they had disclosed that they made been making a profit their stock price would not have dipped below $1.
So, the question arises, is it time to start considering Citigroup Inc. for a stock position? Only if you are a speculator. The stock price is well below all the commonly followed moving-averages (20/50/200), there has been no recognizable or significant candlestick patterns, the RSI is only now moving back up after being beaten below 30 points.
But on the side of speculators, the Chaikin Money Flow indicator is showing that volume is becoming less negative, the Stochastic and MACD indicators show that it is very oversold but turning.
So what am I doing? I am sitting on the side lines. I am going to wait for a pull back and an indication that this pop wasn't a one time thing.
Second, U.S. Rep. Barney Frank, chairman of the House financial services committee, said that the up-tick rule, intended to hinder shorting stocks unless they first moved up in price, may be reinstated within a month from now.
Well it looks like all the discussions on the financial media outlets have been heard. 'Bout time!
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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