Weekly Report for Week Ending 5-02-2009

The stock market continues to resist pulling back but at the same time lives along the resistance zones for the indices of interest. We will go into those after the wrap-up.

U.S.

Dow => 8212.41, +136.12

Nasdaq => 1719.20, +24.91

S&P => 877.52, +11.29

Mine

NG => 2.77, +0.12

CVX QJ => 0.02, -0.03

FPL QH => 0.05, -0.05

In my introduction I mentioned that the indices of interest have been living along resistance zones. What does this mean. Well resistance zones are point levels on a chart where a stock or index has reached before and tried to extend above but was not able to. Usually these same resistance zones use to be support zones, the exact opposite. These resistance zones are given a general number but have some margin for error.

In the case of the Dow, the most recent resistance zone is the 8,300 point level. This is looking at a weekly chart. Prior to this, in the last quarter of 2008, 8,300 was a support level. Now for the past few weeks it has been running along this zone.

As for the Nasdaq, 1,750 is the resistance zone it has reached. This level was dropped through and challenged during the latter part of October 2008. Afterwards lower resistance levels were created and challenged.

Finally, the S&P is challenging the 900 point resistance zone it established back in December 2008.

Now there is even more indication that this most recent bull move is coming to an end. However, how fast it will reverse, and how far it will go is uncertain as there are a number of resistance levels that have been converted into support levels as it has climbed to recent heights. I am only suspecting a short pull back for most.

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.

Weekly Report for Week Ending 4-25-2009

Again, I lost track of time and am playing catch up. This was the market results for the week ending 4-25-2009

U.S.
Dow => 8,076.29, -55.04
Nasdaq => 1,694.29, +21.22
S&P => 866.23, -3.37

Mine
NG => 2.65, +.31
CVX QJ => 0.05, -0.05
FPL QH => 0.10, -0.05

Market Outlook
Well, for the past few weeks I have been saying that the market is going down. And I am not above admitting that I can be wrong. However, am I? So far the market has been going sideways, and that does say a lot. What does it say?

It says that their are still sectors that are resisting the still poor economic data. It also says that the economy is very close to a rebound. It won't be long until an official bull market starts.

So what is my opinion? I don't think the next pull back will be as deep as I was expecting. the indices that I report on probably won't fall below the 7,500, 1500, and 800 points levels respectively. At which time we should see another bull move or indication of persisting bearishness.

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.

Market Results

Another week has gone buy and it was option expiration this week. I have a few things to say about the stock and options market. But before I go into that, let's get to the market summary.

U.S.
Dow => 8131.33, +47.95
Nasdaq => 1673.07, +20.53
S&P => 869.60, +13.04

Mine
AMD => 3.56, -0.19 (Sell Assigned@3.00 by AMD DG)
F => 4.00, -0.24 (Sell Assigned@3.00 by F DG)
NG => 2.34, -0.58
CVX QJ => 0.10, -0.10
FPL QH => 0.15, unchanged

Market Outlook
My opinion of the market still hasn't changed. Yes, the government officials of China and the United States say that the economy isn't that bad and is actually showing signs of improvement, and I agree with them. But, we are not talking about the economy. We are talking about a more specific topic. The stock market.

As I have been mentioning for the past few weeks, the market is over bought, too much money is in it for this cycle. Every week has been showing week gains. This is one indication that the market is running out of steam. It is only a matter of time until the market reverses. Now, the reversal probably won't be very large, but it must occur before the market can move significantly higher.

Options Market

So I got assigned. Oh well. You win some, you loose some. My Ford and AMD stock got called away from me because this bull move has been resisting the inevitable. It can't maintain these levels for much longer, but it did it long enough to get me called out. 

Oh well. At least I made a profit on my stock positions. Both Ford and AMD were originally purchased  at 1.92 and 2.21 respectively.

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.

Weekly Report for Week Ending 4-10-2009

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.

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.

"PUT"ting to Action a Bear Strategy

As expected from my very impromptu market rap up before the market closed, the bears owned the day. (As a quick note, I am sorry for the bad grammer in that last post.) So what did we have going on and what am I doing about it?

Asia:
Nikkei => 7,945.96 , -26.20, -0.33%
Hang Seng => 13,130.91, +13.75, +0.10%
Straits Times => 1,584.86, +8.93, +0.57%

Europe:
FTSE => 3,816.93, +11.94, +0.31%
DAX => 4,043.46, +47.14 +1.18%
CAC => 2,776.99, +16.65, +0.60%

U.S.:
Dow => 7,400.80, -85.78,-1.15%
Nasdaq => 1,483.48, -7.74, -0.52%
S&P => 784.04, -10.31 -1.30%

Me:
AMD => 2.96, -0.01
F => 2.51, +0.04
FPL DI => 5.66, +1.77
NG => 8, +0.07

A profitable day for those that purchased wisely. But a day of disappointment for those that continue to expect the bulls to continue indefinitely. The market continues to poise itself for another bear move to test the most recent lows of a few weeks ago.

We have the report of the bill to steeply tax the execs that earned contracted bonuses, despite their failure to produce, was passed today. But such news didn't do enough to offset the news about additional job cuts occurring and the sale of failed IndyMac being closed with One West. Also, AIG sues Countrywide (ahem, Bank of America owns them) over the loses taken on bad loans. The fingers continue to be pointed around. So sad.

I am putting in a tight stop for my FPL DI position tomorrow to prevent any unnecessary loss of capital. I will, however, allow for all of the Covered Call positions to continue as is. I made my money on the sale of the options against the asset and will or can on the calling away of my stock or the sale of the next option.

I will also be looking for confirmation tomorrow that FPL is reversing. Today FPL put in a doji candlestick and I have been repeating that the Stochastic and MACD are nearing oversold. So I think now is a good time to plan for a put on FPL as well. Don't know the numbers now and too tired to run them. Hopefully I will have them before the market opens in the moning.

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.

Bulls Push On! But For How Long? To Inflation and Beyond!

The markets being followed were mostly green today, with solid gains, but how long will this little rally last?

Asia:
Nikkei => 7,972.17, +23.04, +0.29%
Hang Seng => 13,117.17, +239.08, +1.86%
Straits Times => 1,575.94, +16.91, +1.08%

Europe:
FTSE => 3,804.99, -52.11, -1.35%
DAX => 3,996.32, +8.55, +0.21%
CAC => 2,760.34, -6.94, -0.25%

U.S.:
Dow => 7,486.58, +90.88, +1.23%
Nasdaq => 1,491.22, +29.11, +1.99%
S&P => 794.35, +16.23, +2.09%

Me:
AMD => 2.97, +0.21
F => 2.47, +0.19
FPL DI => 3.89, +0.08 (Note: Closing Bid was 5.50, so unofficial change is +1.69)
NG=> 2.51, +0.26

Today was an impressive push to the upside in late trading. Reason for the push was the announcement that the Federal Reserve would buy $300 billion in government debt (long-term Treasury securities). Why would this cause the market to go up? Well that took me a moment to figure out.

Apparently it is a speculative reaction. Investors are assuming that if the Federal Reserve is buying the debt that the government has racked up, then the Fed is showing confidence that the debt will be payed off. In other words, that all the assistance that the government has supplied to struggling banks will be paid back with interest. Now this interest needs to be significant enough to cover the interest to be paid out to the Fed for buying the Treasury securities. If these banks are going to be able to pay back their debt with interest significant enough to pay back the aid they received, then they should be liquid enough to lend money to you and I, in the form of mortgages, loans, and credit card limits. Right?

But there is more. The Federal Reserve also lends money out to the banks themselves. Money they use to lend to you and I at a marked up interest rate. Doesn't something seem strange about that? The Federal Reserve is effectively loaning money out to these same banks by means of two different avenues. And where are they getting this money to buy the Treasury securities and loan to the banks? They get it from the U.S. Treasury that prints the money and stamps the coins. Hmm, I smell inflation coming around the corner very quickly, how about you?

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.

World Markets Mixed; U.S. Beginning of Recession Stagnation?

Yesterday, the rally train looked like it ran out of steam, and I made some predictions as to what the market results for Monday meant. I will discuss these in a little bit. But first, the market results.

The Nikkei put in solid gains today, while the rest of Asia swallowed modest losses. Europe continued that sentiment with losses for their major three indecies. The U.S., on the other hand, after a slow and mixed start attempted to swallow up all the losses that were put in yesterday.

By mid-day all indecies put in a solid gain of at least 1%. At the closing bell all three indecies recorded more than 2% in gains. This was on news that construction of new homes are starting to go up and so are the wholesale prices, as well as the continued exercise by the Obama administration and the Treasury to stop and retrieve the money that AIG paid out in bonuses to members of the division that caused AIG to stumble.

Asia:
Nikkei => 7,949.13, +244.98, +3.18%
Hang Seng => 12,878.09, -98.62, -0.76%
Straits Times => 1,559.03, -27.29, -1.72%

Europe:
FTSE => 3,857.10, -6.89, -0.18%
DAX => 3,987.77, -56.77, -1.40%
CAC => 2,767.28, -24.38, -0.87%

U.S.:
Dow => 7,395.70, +178.73, +2.48%
Nasdaq => 1,462.11, +58.09, +4.14%
S&P => 778.11, +24.22 +3.21%

Me:
AMD => 2.76, +0.28
F => 2.28, +0.18
FPL DI => 3.81, +0.21
NG => 2.25, -0.15

Yesterdays opinion included a probability spread about what the market would do today. In that prediction I said:

I predict a 10% chance of a big rally, 30% chance of stagnant movement, but a 60% chance of the bears taking over.

I should probably supply some detail about how I came up with my percentages, and I think I will, just not today. To keep it simple I will say this much; a third is the chart performance, a third are the indicators, and a third is the news. Since, the news yesterday was primarily about the AIG bonuses, I allowed it to carry over to the bear side of my analysis. I also allow up to 10% for the occasional anomaly. Something that has become more common in these economic times.

So what did the market do today? It ran stagnant. How can I say that? The news produced today was only enough to swing the prediction about 20% toward stagnation. This is because it did not create a significant change of opinion to cause it to advance significantly above highs of yesterday.

The fact that there was good economic news in regards to home building and wholesale goods is promising. However, there was still the occasional layoff report such as the laying off of 2,454 workers in 3 states by Caterpiller. Those, fortunately, are becoming less frequent. It is logical to say that the bear is wounded but not dead, yet.

So what am I predicting for tomorrow? Well my opinion is still bearish for the general market. See the bullet points I provided in Day Five of the Bull? for my reasons why. I do also have something to add. It is my opinion that we may start seeing the market creating a base, and it may be relatively "thick". What I mean by "thick" should become apparent as I give you my numbers.

For at least the next three to six months, I see the Dow bouncing between 6500 and 7500, the Nasdaq between 1250 and 1450, and the S&P between 650 and 800. These numbers are the most recent support and resistance levels that they have encountered. Considering all the world news and the increasing positive tone, these seem to be most logical to me. The prefect place for day- and swing-traders to play.

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.

Day Five of the Bull?

The markets go for a fifth day of gains. But were they able to make it? The Asian markets start off with mixed gains but up in the green. Europe continues the rally making solid gains in all indecies. But as for the U.S., it looks like the train just ran out of steam.

Despite week economic news and the report that AIG is giving out bonuses with tax payer money, the U.S. indecies marched upwards. However, that was short lived. As of the closing bell, all indecies ended negative.

Standing news is that President Obama has ordered that every legal avenue be explored to block the AIG bonuses.

Asia:
Nikkei => 7,704.15, +134.87, +1.78%
Hang Seng => 12,976.71, +450.91, +3.60%
Straits Times => 1,586.32, +8.80, +0.56%

Europe:
FTSE => 3,863.99, +110.31, +2.94%
DAX => 4,044.54, +90.94, +2.30%
CAC => 2,791.66, +86.03, +3.18%

US:
Dow => 7,216.97, -7.01, -0.10%
Nasdaq => 1,404.02, -27.48, -1.92%
S&P => 753.89, -2.66, -0.35%

Me:
AMD => 2.48, -0.04
F => 2.10, -0.09
NG => 2.40, -0.06
FPL DI => 3.60, +1.16

Looking into the technicals of this rally, it looks like the bull is about to be slaughtered by the bear. And here are the reasons why.

• We had 4 full days of overall gains in the U.S. market.
• The Dow has put in what appears to be a grave stone doji,
• The S&P is more of an inverted hammer (but it might as well be a grave stone), and
• The Nasdaq put in a solid bullish engulfing.
• None of the indices broke above the 50 point threshold of the RSI indicator.
• We have the stochastics and MACD of all three indices approaching oversold levels, plus the MACD is under the zero line as it has been the entire rally. So if you are not in the market now, it's too late anyway.

What is the market going to do tomorrow. I predict a 10% chance of a big rally, 30% chance of stagnant movement, but a 60% chance of the bears taking over. Time for me to analyze and put in a few put plays for the coming week.

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.

A Fourth Day of Gains: Bull Market or Head Fake?

Today, Wall Street put in a fourth day of gains. This is the market in review.

Friday the 13th wasn't a day of bad luck as it is touted to be. Overall all the markets did okay. Starting in Asia all indecies made solid gains over 4%. In Europe, only the DAX came under the wire, but only by a hair. With a five more minutes it might have gotten there. And the U.S., although diving at mid-day, ended the day with all indecies fractionally higher than yesterday.

Asia:
Nikkei => 7,569.28, +371.03, +5.15%
Hang Seng => 12,525.80, +524.27, +4.37%
Straits Times => 1,577.52, +83.99, +5.62%

Europe:
FTSE => 3,753.68, +41.62, +1.12%
DAX => 3,953.60, -2.62, -0.07%
CAC => 2,705.63, +11.38, +0.42%

U.S.:
Dow => 7,223.98, +53.92, +0.75%
Nasdaq => 1,431.50, +5.40, +0.38%
S&P => 756.55, +5.81, +0.77%

As For Me:
AMD => 2.52, +0.12
AMD DG => 0.20, +0.08 (Sold to Close @ 0.20)
F => 2.19, +0.09
FPL DI => 2.44, +0.09
NG => 2.46, -0.02

I sold out of the AMD $3Apr09Call (AMD DG) because it finally returned to profitability. Now why would I sell out of it now that it has returned to profitability? That is because $2.50 is a resistance zone for AMD since January 5th when, on huge volume, it broke over it for a few days. It has since then attempted to break over it about 6 times and failed. Today was the first time it has exceeded $2.50 but it retreated back towards it before the market closed. That kind of activity indicates that those who purchased it back in early January were selling it off.

In addition, the Stochastic indicator shows that it is nearing the 70 mark where it retreated from previously. Also, the MACD has exceeded its most recent apex. Such things at the top of a move indicate that momentum may soon reverse. And since the options are more volatile than the stock, I am not willing to risk the gains I have made.

I have, however, a sold $3Apr09Call against my current stock position (Covered Calls) that I picked up back on February 25th. I will be holding on to AMD from this point on, adding to my position on pull backs.

Speaking of Covered Calls, I also sold a $3Apr09Call against my Ford (F) position. This was done for much of the same reasons that I did it against AMD. Ford stock is nearing the top of an upward channel, the stochastic and MACD are high, and I intend on adding to my position on pull backs.

I see both Ford (F) and AMD (AMD) as viable companies, and their stock prices affordable. I also see the potential for more gains on this movement. Although it might get up to three dollars a share before the third Friday of April, I think it will pulling back below $3 before option expiration.

Nova Gold (NG) is another stock that I am trying to sell Covered Calls against. However, the next option available is the $5Apr09Call and it has not reached a price that I would like to sell at.

What can we expect for next week? Technically speaking, there is still plenty of upside left for this swing. However, if history is any kind of witness, and it usually is, There will be a pull back day coming. How strong that day is, will speak volumes about the future of the market.

If the pull back wipes out two or more days of gains, we can expect that the bottom was not quite reached and the prediction of 5000 for the Dow is still probable. If the pull back wipes out gains in small increments before putting in more days like this week, then we just might have seen the worst of it.

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.

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.

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.

False Positive Confirmed

Looks like all the bulls should have stayed on the side lines yesterday. Today, just about every index that I have been reporting on has taken a dump. The only exception to the malaise was Japan's Nikkei. It apparently didn't get the memo about China and continued to rally on news that the U.S. had a positive day.

Asia:
Nikkei => 7,433.49, +142.53, +1.95%
Hang Seng => 12,211.24, -119.91, -0.97%
Straits Times => 1,518.64, -25.70, -1.66%

Europe:
FTSE => 3,529.86, -116.01, -3.18%
DAX => 3,695.49, -195.45, -5.02%
CAC => 2,569.63, -106.05,-3.96%

U.S.:
Dow => 6,595.32, -280.52, -4.08%
Nasdaq => 1,299.59, -54.15, -4.00%
S&P => 682.56, -30.31, -4.25%

As for me:
AMD => 2.15, -0.15
AMD DG => 0.10, -0.02
BKC PX => 2.30, +0.45 (Bought to Open @ Limit 1.85, Stop 1.30)
F => 1.78, -0.09 (Sold @ Stop $1.78)
HRP JZ => 0.90, -0.25(Sold to Close @ Market, Contingent on HRP < mips =""> 2.00, -0.05
NG => 2.79, +0.21

Further reports from the Associated Press fills in the why of this market tumble.
Boeing Reports Lower Orders
General Dynamics Cuts Production and Jobs
GM Survivability Questionable
Retailers Report Declines in Sales, Except Wal-Mart
12% Behind on Mortgage or in Foreclosure

If it wasn't for this one ray of sunshine, the market may have tumbled even further.
Jobless Claims Unexpectedly Drop

Apparently analysts expected the claims to drop only 20K and not the 31K from the 670K of the previous week. But don't celebrate just yet, the banks still haven't solved their issues. I still see the probability of further losses before a general market recovery can be claimed.

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.

Uncle Sam's Economic Plan

Today I watched a recording of the CNBC interview with Eric Hovde of Hovde Capital Advisors LLC. (Uncle Sam's Economic Plan) This is another guy that has his head on straight. I will be commenting on it today. But before I do that let's review the markets.

Another wild ride in the markets today. The markets showed a wrestiling of position between the bulls and the bears in the U.S. markets, but the bears won out once again.

Asia:
Nikkei => 7,229.72, -50.43, -0.69%
Hang Seng => 12,033.88, -283.58, -2.30%
Straits Times => 1,528.51, -4.89, -0.32%

Europe:
FTSE => 3,512.09, -113.74, -3.14%
DAX => 3,690.72, -19.35, -0.52%
CAC => 2,554.55, -26.91, -1.04%

U.S.:
Dow => 6,725.30, -37.99, -0.56%
Nasdaq => 1,321.01, -1.84, -0.14%
S&P => 696.33, -4.49, -0.64%

As for me:
AMD => 2.07, +0.06
F => 1.81, -0.07
NG=> 2.60, +0.06
AMD DG => 0.10, +0.01
HRP JZ =>1.50, unchanged
NLH JZ => 0.87, -0.68 (Sold to Close).
QAV QZ => 1.83, +0.06 (Bought to Open @ 1.77, Stop @ 1.59)

Because of the continuing lack of confidence in this administrations policy making, I am betting on the bears with a put position against the Nasdaq ETF, Powershares QQQ Trust (QQQQ, QAV QZ - 26MAY09Put). But as you can tell I am still holding on to most my bull positions unless their stops are met.

My reasons for holding are because of their extremely low price points, some technical indicators, and my inherent personal optimism in for those companies.

Now on to the interview, Uncle Sam's Economic Plan. Eric Hovde made a lot of good points that I want to reiterate. But first some numbers that I was interested to see. Residential real estate loans account for about 40% of total bank assets, commercial real estate loans accounts for about 24%, and business real estate loans accounts for about 20%. Right now it is the residential real estate that is dragging down the sector. It's Hovde's opinion that commercial real estate is not far behind from being added to the problem even while residential real estate continues to slide. He is looking for it to start reversing quickly if residential real estate finally stabilizes and turns around.

Hovde is also more realistic in my opinion and states that the U.S. is "rapidly and subtly falling into a depression." This, he says with the understanding that there really isn't a technical definition of a depression. I agree with Hovde, and I am sure most people do, that the credit bubble was the cause.

Despite the governments attempts, the market has a total lack of confidence in the administrations direction. The continuing opinion is that there are too many general ideas out there with few if any specifics about what is being done now to stimulate the economy. As a result the government appears to be quasi socialist at this time.

Hovde describes some examples as to how the stimulus does not focus enough on long lasting changes. One such example is on the building of a high speed rail. Hovde sees a high speed rail as a good idea, but where it is being planned for is the problem. "Anaheim to Vegas? Are you kidding me?! ... go to Disneyland and then gamble away [in the casinos]?", stated Hovde.

Hovde is not overly critical about all things. He understands extending unemployment benefits, funding police forces, health care and the like. He is mostly stunned by the degree and scope. He is even fine with paying higher taxes. (Hearing that shocked me.)

Things that Hovde disagrees with are the taking away of the home mortgage deduction, not for him but for all the others that need it in this housing recession. As far as the deduction for charitable contributions, Hovde is "infuriated" that it is being reduced at this time where charities are needed most.

Another issue that irritates Hovde is the exploitation of cramdown. He sees people gaming the system. He has actually been approached by individuals that are capable of paying there mortgage wanting to stop paying their mortgage just so that they can get a reduction in mortgage payment.

My opinion, why wasn't Hovde added to the President's cabinet?

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.

Today's Market Recap.

Greetings! How did the markets fare today? Lets start with the international markets.

The Asian markets produced a mixture of results. Although all three major indecies opened higher, but only one was able close with a gain. The Nikkei closed at 7,457.93 for a loss of -3.29 points, a -0.04% move. The Hang Seng closed at 12,894.94 for a loss of -110.14 points, a -0.85% move. And that leaves us with the Straits Times which closed at 1,617.44 for a fractional gain of +0.65 points, a +0.04% move.

In the European markets all three major indecies had bull days. The FTSE closed at 3,915.64 for a gain of +66.66 points, a +1.73% move. The DAX closed at 3,942.62 for a gain of +96.41, a +2.51% move. And the CAC closed at 2,744.84 for a gain of +47.92, a move of +1.78%.

The Dow closed at 7,182.08 for a loss of -88.81 points, a -1.22% move. The NASDAQ closed at 1,391.47 for a loss of -33.96 points, a -2.38% move. The S&P closed at 752.83 for a loss of -12.07 points, a -1.58% move.

Initially the three major U.S. indecies opened with a bullish warcry swallowing up the losses of the previous day in the first couple hours. This was on the rumors that the government aid deal with Citigroup may come out this week; also the news that the government continues to support private banking and not nationalization.

Shortly afterwards news that President Obama unveiled details about his 10-year budgeting plan surfaced. Following that news, it appears the bears went to market and cashed out, erasing all the progress that the market had made. Additional news that new home sales fell to a record low in January did not help the situation.

The media would have you believe what was heard in President Obama's speech caused the market to go down. But one could also argue that his speech made it go up, because during his speech the Dow rose back to an earlier intraday high. What did cause the market to go down was the realization that the budget cuts to all of those private health programs that were not working for the good of the citizens cause all investors to pull out of several of them. Chances are that as soon as understanding about which private health insurance companies were not waistful becomes apparent, those will start to go up while the rest will reform so that they will be viable to government subsidies.

I still find surprising that despite the assumptions about the bank stress test and the list of weak banks increasing didn't cause those sectors to decline. Four of the leading industries on Yahoo's Industry Center were banks. Sadly though the worries about the health care sector was over powering.

But there is some good knows. For the week, so far, the Dow is only down half of what it down at the end of last week and there is only one market day left. This investor thinks that profits taken today will start to funnel into other sectors, probably healthcare and education as those were the sectors talked about by President Obama.

My portfolio as it stands today:
AMD - My position on Advanced Micro Devices closed today down at 2.09.
F - My position on Ford Motors closed today down at 1.98.
FPL - Florida Power & Light continued to decline today breaking and holding below the support level that I was counting on for it to return to the up side. I will allow it to expire and not resubmit another one until I see evidence that a positive move is in the works. For that reason I shall be leaving it out of my posts until further notice.
HRP JZ - My 2.50Oct09 call on HRPT Property Trust (HRP) closed unchanged at 1.50
NLH JZ - My 2.50Oct09 call on Libery Media (LINTA) closed unchanged at 1.55

There are also two other positions that I had prior to opening this blog that I wish to include and will be commenting on.
AMD DG - I have a 3.00Apr09 call on AMD which closed down at 0.10
NG - I have a position on NovaGold which I added to today. Reasons? It's price has changed direction to the upside, and it has reached and bounced off of my indicators that it has been oversold and momentum has shifted. There is, however, a recent ceiling at about $4, so there may not be much room for it to go up, unless it breaks through. That is okay since the goal with this stock is to sell OTM calls against it so I am just increasing my stake for future use. NovaGold closed up at 2.93, but slightly under where I added to my position.

My day wasn't good but not that bad. I shall be looking for other opportunites and will be posting if I see something.

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.

Today in the Market

Well, today wasn't another up day as one would have hoped. Apparently, President Obama's speech lacked details again according to those that polled investor opinion, and the stock market was set to open lower. However, it didn't affect the Asian markets the same way. After the speech, the Asian markets continued to hold on to their gains and even picked back up again hours prior to it's close.

At the close the Nikkei ended at 7,461.22, up +192.66 points, or +2.65%. The Hang Seng closed at 13,005.08, an increase of +206.56 points, a +1.61% move. And the Straits Times closed at 1,616.79, +2.35 points higher, a marginal +0.15% move.

Unfortunately, it appears the European markets didn't see it the same way as Asia and was affected by the opening of the US markets towards the end of their day. The FTSE closed at 3,848.98 only an increase of +32.54 points or a +0.85% move after tumbling from a high of 3,884.06 to a low of 3,803.92, a deficit of -48.68 points from it's open. The DAX closed at 3,846.21 a decline of -49.54 points, a -1.27% move to the downside. The CAC closed at 2,696.92 a decline of -11.13 points, a marginal move of -0.41% to the downside.

Today the Dow closed at 7270.89, a decline of -80.05 points, or a -1.09% move. The NASDAQ closed at 1425.43, a -16.40 points, or a -1.14% move. The S&P closed at 764.90, a -8.24 points, or a -1.07% move. An overall, bearish flat day.

So how did I do in the market today? Well the intended trades of Advanced Micro Devices (AMD), Ford Motors (F), Liberty Media (LINTA, NLH JZ), and HRPT Property Trust (HRP, HRP JZ) executed today. My preferred stock of FPL didn't get moved into today due to moving lower. I still like it at this price but I am unwilling to change my entry and exit points. I will be resubmitting them for tomorrow.

Advanced Micro Devices - I was entered into AMD at 2.21 and the day ended with it at 2.22. Minus commissions this is a bearish flat day.

Ford Motors - I was entered into F at 2.04 and the day ended with it at 2.01, a bearish day.

HRPT Property Trust - I was entered into the long call of HRP JZ at 1.50 and the day ended with it at 1.50 still. Minus commissions this is a bearish flat day

Liberty Media - I was entered into the long call of NLH JZ at 1.55 and the day ended with it at 1.55 still, a bearish flat day.

Other than resubmitting my OTO order for FPL I have no other trades I am planning to make at this 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.

It's Only My Opinion.

It's only my opinion, but the state of the current economy is a result of short-sightedness and the inconsistent way that individuals are taught financial math.

The short-sightedness has to do with the issue of instant gratification. This is not the forum for it so I am not going to get into it. However, the method by which people are taught financial math is for this forum. Here I am going to give you my opinion. Take it or leave it, it is only my opinion.

Too often the math for money is too basic. It's goal is to answer the basic of questions. How many pennies, nickels, quarters, and dimes make a dollar? How to calculate sales tax? How to calculate interest? So may think that is enough, but there is a lot that is missed.
People need to understand what to do with this math that they are taught and that goes well beyond the basic information that they are taught. Some teachers try to give projects to their students that will get them to apply what they have learned, and I applaud the effort. But more is needed.

How much more can be done? I have a few ideas but I don't want to get into them right now, but the key one is that financial math courses should be mandatory in high school. By the time a child leaves elementary school they should already know how to add, subtract, multiply, and divide whole numbers, decimals, percents, and fractions. I did and I am from a middle to low income school district, so the school budget is not as relavant to the math department. In middle school (junior high for some) the students should be learning algebra, if they don't know enough to do algebra then they shouldn't be there. Hold them back! In senior high students should be given accounting and practical math courses.

What about advance math courses? If they want to learn calculus then they can take it as an elective. The majority of students are not going to become scientists or engineers no matter how hard you push them. It is not what they want. Maybe a psychological career placement test should be given to place them on the righ high school career path so that they will learn what they need to learn to get the career they want. Hmm, just a thought.

Well that is enough ranting for today. Tomorrow...stock picks and exit strategies according to my opinion.

Monday, the 23rd of February, in the stock market the Dow lost 250.89 points to arrive at 7114.78, a low not seen since 1997. As for the NASDAQ and the S&P, the NASDAQ lost 53.51 points to 1387.72, and the S&P lost 26.72 points to 743.33. Maybe tomorrow will be better. Probably not much, if any, until unemployment figures show a significant slow down.