Archive for 2009

Swing trading virtual portfolio – Optrader

This was another great week of trading for the swing trading virtual portfolio. Thank you everyone for some great suggestions in the comments.

It is pretty interesting this week to notice that some of the profits and losses where not very significant in terms of Rs (or in terms of percentage in your virtual portfolio), despite significant moves in the underlying. This is because our sizes were very small as we entered the positions with very wide stops. Those happened in financials mostly where volatility was high all week.

For example, on our last COF trade, we bought puts when the stock was at $19.05 and rode it all the way to $14. That’s a 26% move in the stock. But we only booked a 0.76R profit in he virtual portfolio, or 2.28%. That’s because our stop was at $23.

On the other side, the loss on WFC was just a little bit more than 1R as we had a wide stop on this one as well.

This is a very interesting side of the strategy, as we modify the position size depending on volatility, and distance to our stop. This way we avoid big losses on stocks that can move significantly overnight. It is all about risk management.

To learn more about the swing trading virtual portfolio (strategy, membership etc.), please click here


 

- Optrader





Swing trading virtual portfolio – Optrader

This was another great week of trading for the swing trading virtual portfolio. Thank you everyone for some great suggestions in the comments.

It is pretty interesting this week to notice that some of the profits and losses where not very significant in terms of Rs (or in terms of percentage in your virtual portfolio), despite significant moves in the underlying. This is because our sizes were very small as we entered the positions with very wide stops. Those happened in financials mostly where volatility was high all week.

For example, on our last COF trade, we bought puts when the stock was at $19.05 and rode it all the way to $14. That’s a 26% move in the stock. But we only booked a 0.76R profit in he virtual portfolio, or 2.28%. That’s because our stop was at $23.

On the other side, the loss on WFC was just a little bit more than 1R as we had a wide stop on this one as well.

This is a very interesting side of the strategy, as we modify the position size depending on volatility, and distance to our stop. This way we avoid big losses on stocks that can move significantly overnight. It is all about risk management.

To learn more about the swing trading virtual portfolio (strategy, membership etc.), please click here


 

- Optrader





Waiting For Geithner

Tim Duy at Tim Duy’s Fed Watch discusses the stimulus plans likely to be announced on Monday.

Fed Watch: Waiting For Geithner

Courtesy of Tim Duy at Tim Duy’s Fed Watch (at Economist’s View):

Waiting For Geithner, by Tim Duy: Treasury Secretary Timothy Geithner is slated to announce the latest financial stabilization plan Monday.  From various press reports and leaks, these are things to be looking for:

1. No bad bank.  The plan appears likely to leave toxic assets in the hands of the financial sector, rather than purging them from the system once and for all.  The bad bank idea is proving to be prohibitively costly if your fundamental goal is to maintain the status quo – one cannot shower the sector with such financial largess and expect to leave existing shareholders and bondholders unharmed.  Instead, there appears to be a move toward guaranteeing losses beyond a certain amount, a "ring fence" approach.

2. More string tied to aid.  Institutions receiving aid will be subject to "limits" on executive pay, requirements that they modify troubled mortgages when possible, and requirements that government money stimulate new lending appear to be among the strings.  The additional strings will likely discourage willing participation.

3. Triage?  From Bloomberg:

The Treasury may increase its stake in lenders that are judged short of capital, the people said on condition of anonymity. Should extra taxpayer funds result in a majority ownership by the government, officials would then decide whether to liquidate the institutions, place them into receivership or retire the companies’ assets over time, they said.

This sounds like Treasury would try to identify those institutions worth saving, and either nationalize or liquidate those with that require federal help on the order of a de facto nationalization.  The Wall Street Journal suggests something different:

The rescue is shaping up to include a second round of capital injections with tougher terms. The government is looking to get money into banks by buying preferred shares that convert into common equity within seven years; that avoids diluting current shareholders’ stakes while helping banks better withstand losses. The Treasury may also allow banks that already received capital injections to convert the


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Weekly Wrap-Up

What a great week!

I am so happy we stuck to our guns after that very disappointing Monday session.  Fortunately, after the awful finish the market had to last week, I went into last weekend's Economic Overview with the full intention of making a bear case for the market going lower and ended up realizing - I couldn't find one.  As I said at the conclusion of that post:  "So plenty of doom and gloom around but, after two days of reading, I have to say that I still think we have suffered enough.  The fact that there is money out there to pay Wall Street executives 23 times what it costs to feed the nation of Zimbabwe for a year or half of California’s budget shortfall indicates that what we have here is more of a mis-allocation of funds, rather than an actual lack of funds.  For good or inflationary ill, the Fed has a virtually infinite supply of ammunition to fight this downturn and they are determined to use it."

While the markets continued to drift lower on Monday, it was only the follow-through we expected from the previous week's action as they finished at the bottom of the 5% rule so there was no shock, actually relief, when we drifted down to test -2.5% during Monday's session.  As I said Monday morning: "We have been playing it bearish since last Tuesday so we’re fine overall and we had NO reason to change our stance into the weekend as we expected plenty of doom and gloom in the weekend news to sour the mood of investors today but let’s take a look at the week ahead and see if we can find a path to navigate out of this mess.  Hopefully we can find a good reason to do a little bottom fishing off our buy list (hedged, of course) and sell a few puts into the morning dip."  How was that for a winning strategy?

Wicker and his diversified group of collegues vow to hold things upI mentioned that the rest of the world was getting on with their bailouts and what was holding our market back was the ridiculous posturing of the Minority Party (ironically depicted here as 4 old white men) as they "vowed opposition to the stimulus plan," something that they are still doing this weekend as almost-President, John McCain, claimed "…
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Fed Overwhelmed

Mish updates on the Fed’s overwhelmed state in dealing with AIG derivatives and the Bank Rescue Plan.

Fed Overwhelmed, Calls Emergency Consultants To Untangle AIGClick image for clear view, then scroll down

Courtesy of Mish

AIG is just one piece of the derivatives mess. Nonetheless AIG alone is so complex no one can figure it out. In response, the Fed Calls Emergency Consultants To Untangle AIG.
 

“I don’t think the Fed has seen anything like this,” former New York Fed general counsel and AIG executive Ernest Patrikis said in an interview. “AIG just got so complex in terms of private corporate matters that you just need that outside expertise.” Patrikis is now with the law firm of White & Case in New York.

In addition to hiring consultants, the Fed and the Treasury have retained Wall Street firms to help manage more than $2 trillion in bailout and emergency-loan programs.

Pacific Investment Management Co. runs a $259 billion program to backstop the commercial-paper market. BlackRock Inc., Goldman Sachs Asset Management, Pimco and Wellington Management Co. are managing the Fed’s purchases of up to $500 billion of mortgage-backed securities. JPMorgan Chase & Co. oversees a separate program under which the Fed may lend up to $540 billion to support money market mutual funds.

Last month, the House passed conditions for releasing the remaining $350 billion of financial-rescue funds, including a requirement that the Fed give details of the contracts and selection process for the mortgage-backed securities purchase program’s managers. The Senate isn’t planning to take up the legislation.

BlackRock is also managing and selling assets acquired in the Fed’s $29 billion rescue of Bear Stearns Cos., as well as securities called collateralized debt obligations the central bank purchased in the bailout of AIG, the largest U.S. insurer by assets.

Staff Overwhelmed

Such contracts show how the Fed’s in-house staff has been overwhelmed by new responsibilities that the central bank has taken on in handling the crisis.

“Once the government starts getting into the business of restructuring companies, there are competency deficits,” said Phillip Phan, professor of management at the Johns Hopkins Carey Business School in Baltimore. “It’s inevitable they’ll go back to Wall Street for advice.”

Still, he said, “the man in the street would say, ‘We’re paying to fix somebody else’s mistake by paying the very people who are part of the system that produced the mistake.’”

Babcock


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Guy Cohen Interview with Robin

Guy Cohen Interview
Guy Cohen is the creator and originator of Flag-Trader
as well as being the author of two best selling books
published by FT Prentice Hall, with a third to follow in 2009.

Options Made Easy
The Bible of Options Strategies
Volatility Made Easy (2009)

Quote from Robin : “I strongly endorse Guy Cohen’s ‘Flagtrader’ system because [...]





Charts for the Week

By Robin Hood Trader

   

2-7-2009-11-56-33-aminduindu2

The first resistance target is 8340-8405.  If the DOW successfully breaks through that  level, with better than average volume and it stays above that area for at least two trading sessions, then chances are we will be heading to 9000.  If the DOW moves through 8400, it is likely to retest 8400 as new support before moving up.  It is very unlikely that the DOW will break support at 7900.  Robin says we’re going up.

2-7-2009-12-12-47-pmspx

We are at a confluence of resistance with the first challenge at 878 and then a host of congestion from December.  If we break through 878 on volume, we will likely continue up to 944.  If the SPX successfully moves through 878, it will most probably come back down to 878 briefly to retest old resistance which then becomes new support before starting move up to 944.  We have solid support at 800 and it is my opinion that we are not going to break it any time soon.  Robin says we’re going up.

2-7-2009-1-05-20-pmcompq

Next stop is 1666!!





THE WEEK THAT WAS 2/2-6/2009

Robin must have a crystal ball!!  Not really, he just has a knack for calling the market.  If you want to learn how he does it and learn how to trade the market the way he does, then click here.
Here is the chart commentary from last week posted on Saturday 1/31/2009.
“ 7900-8000 has exhibited remarkable [...]





CHARTS WEEK ENDING 2/6/2009

-The first resistance target is 8340-8405.  If the DOW successfully breaks through that  level, with better than average volume and it stays above that area for at least two trading sessions, then chances are we will be heading to 9000.  If the DOW moves through 8400, it is likely to retest 8400 as new support before [...]





RISK GRAPHS: THE CALL CALENDAR

TOOLS OF THE TRADE
THE CALL CALENDAR
 

The call calendar is comprised of two trading instruments, 1) the long call and 2) the short call.  The uniqueness of the trade is the result of the positioning of those two instruments.  It is particularly hard to represent the risk/reward in a risk graph.  The position can be hurt [...]





 
 
 

Phil's Favorites

Congress is considering privacy legislation - be afraid

 

Congress is considering privacy legislation – be afraid

Courtesy of Jeff Sovern, St. John's University

Supreme Court Justice Louis Brandeis called privacy the “right to be let alone.” Perhaps Congress should give states trying to protect consumer data the same right.

For years, a gridlocked Congress ignored privacy, apart from occasionally scolding companies such as Equifax and Marriott after their major data breaches. In its absence, ...



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Zero Hedge

Key Events This Week: Trade War, EU Elections, Durables, PMIs And Fed Minutes

Courtesy of ZeroHedge

Looking at this week's key events, Deutsche Bank's Craig Nicol writes that while the unpredictable nature of US-China trade developments will likely continue to be the main focus for markets again next week, we also have the European Parliament elections circus to look forward to as well as various survey reports including the flash May PMIs which may offer some insight into the impact of trade escalation on economic data. The FOMC and ECB meeting minutes are also due, along with a heavy calendar of Fed officials speaking.

The European Parliament elections will kick off next Thursday with voting continuing into the weekend across the continent, with results expected on Sunday. With the elections surrounded by internal and external challenges for the EU, members di...



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Kimble Charting Solutions

Will S&P 500 Double Top Derail The Rally?

Courtesy of Chris Kimble.

The rally off the December stock market lows has been strong, to say the least. The S&P 500 rallied 25 percent before hitting and testing the 2018 high.

The old highs proved to be formidable resistance and ushered in some volatility in May… and a 5 percent pullback.

In today’s 2-pack, we look at that resistance level – could that be a double top? We can see similar patterns develop on the S&P 500 Index and its Equal Weight counterpart.

Both indexes are testing short-term Fibonacci retracement levels of the recent decline at point (2).

What takes place here after potential double top highs will be important. Stay tuned...



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Insider Scoop

60 Biggest Movers From Friday

Courtesy of Benzinga.

Gainers
  • Fastly, Inc. (NYSE: FSLY) shares jumped 50 percent to close at $23.99 on Friday. Fastly priced its 11.25 million share IPO at $16 per share.
  • Outlook Therapeutics, Inc. (NASDAQ: OTLK) shares climbed 37.3 percent to close at $2.10 on Friday after the stock rose over 68 percent Thursday following an Oppenheimer initiation at Outperform with a price target of $12.
  • Cray Inc. (NASDAQ: CRAY) shares rose 22.5 percent to close at $36.52 after Hewlett Packard Enterpri...


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Chart School

Weekly Market Recap May 18, 2019

Courtesy of Blain.

China – U.S. trade talk continued to dominate the week.   A heavy selloff Monday was followed by 3 up days, with Friday moderately down.

On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%.

Then on Wednesday:

The Trump administration plans to delay a decision on instituting new tariffs on car and auto part imports for up to six months, according to media reports.

...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Biotech

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

Reminder: We are available to chat with Members, comments are found below each post.

 

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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