Market Uncertainty

Today was an interesting day in the market, technically speaking. Both the Dow and S&P put in candle sticks that indicate the likelihood of a change of direction. The problem is that it seems to me to be a reaction to the headlines more than actual economic data (facts).

For the past month, the headlines have been saying that home sales have been going up, that the CARS program has been producing record sales, that GM is not hiring back employees, and that unemployment is slowing. Put what do the headlines say now? Here are just a few from Yahoo! Finance:
U.S. deficit forecasts due Tuesday - CNNMoney.com
Wall Street pauses after four-day rally- AP
Analyst: Up to 200 more banks may fail in crisis- AP
Sprint Nextel-Virgin Mobile USA deal gets FTC's OK- AP
Gov't extends deadline for clunkers paperwork- AP
Fannie, Freddie shares soar on huge volume- AP
U.S. home lender Taylor Bean files for bankruptcy- Reuters
"Our Country Would Be Healthier" With a Weaker Dollar, O'Rourke Says- Tech Ticker

Here we see plenty of mixed opinions, but the ones that really did a number today were probably the ones about the deficit, estimated future bank failings, and the Taylor Bean bankruptcy.

From what I can tell, it is most often the reports about the government spending and the bank/lender failings that gets investors all in a tizzy in this market recession. The fact, though, that the markets didn't really move that far down today indicates that the investors are on the sideline waiting mostly on the deficit forecast that is due tomorrow. This could result in the market swinging wildly either way. We will just have to see and prepare for either move.

So what happened for me? Well, my NG Put made money, but the stock slipped further; and my Call on ODP isn't doing well either. But there is some information to disclose. I have a stop on my ODP Call and my NG Put. If the market really tanks tomorrow I will probably be out of the ODP Call and I should adjust the stop on my NG Put to protect the gains made today. I already had an order in to protect against further losses if today was a bull day and I have put in for an adjustment to reduce my losses even more if tomorrow is a super bull day.

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

Disclaimer: See bottom of page.

Opinion Has Changed

For a good couple of months I have been saying that the market was going to pull back. I have been saying that the bull move wouldn't be sustained. And I was right. It did pull back. But I was wrong about the strength of that pull back.

After running sideways and down for just over a week, all of the major US indices have put in solid gains for four straight days; breaking through the tops they set the past week. This is a strong indication that another bull move is in the works. Another indication is that the secondary indicators also show recovery in action.

For myself my positions have been unremarkable with meager profits. I still think playing the market is better than sticking my money in the bank as my returns are much more appealing as long as I don't get attached to the security I am investing in. My option positions in NG and ODP are both still in place and green. My straight stock position in NG is also in place although my profits from it's original opening is not as strong. I will be analyzing it more closely.

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

Disclaimer: See bottom of page.

Profit None-The-Less

Today was interesting in the market. The bulls apparently took their money out yesterday to reposition themselves in the market today. All indices went up. But that doesn't change my opinion of the market. Things are still turning. We will just have to wait until next week to see how that turns out.

I personally still did okay in the market today. Both my PUT on NG and my CALL on ODP put in paper profits for me today. Not much, but a start. Now, if you have been following, you know I also own straight stock of NG. So, if my PUT on NG made profit, chances are very high that I lost value on my stock. And truth be told, I did. But I don't own the stock for growth purposes. It is for hedging. I also use it to sell CALLs against when it is bullish.

Anyway, that is all for now.

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

Disclaimer: See bottom of page.

Don't be fooled.

A week ago I said "the reversal is happening now." And what does the market do? It decides to buck against my prediction and push on just a little bit more. But I am not worried. That is just the last few reps of an exhausted man. The work out is over and it is time for rest.

Like last week, the indices are over-bought and the direction of the market is turning. I still have my positions in NG and my PUT position on it is unchanged. Since last week, I have also purchased a CALL on Office Depot (ODP) as my bet against the coming market turn. I did it because I see an ascending-triangle forming and it's secondary indicators are promising.

I just used an expression I don't remember using here before. If you don't understand what I mean by an ascending-triangle, let me explain. Picture in your mind a right triangle where the long flat side is horizontal and at the top; the hypotenuse is on the bottom creating a upward slop from left to right. The flat side is a level of resistance that the stock will have to break through. If a stock creates this kind of pattern while having fairly good secondary-indicators, it is more likely that it will break through resistance and make a run for the sun. Now it will eventually get burned, and come back down, but if we get in on the ground floor. A fairly good amount of profit can be had.

I just took another look at one of my favorite stocks, FPL, and it looks like it might be ready for another rally. Keep your eyes open for a move above 57.91.

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

Disclaimer: See bottom of page.

Imminent Reversal, Now?

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.

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.

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.