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Freezing up, long INTC ahead of earnings

Wow!                   Monday  4 pm 1/14/2008

I sure have had a hard time pulling the trigger lately.  That feeling of freezing up has passed through me most days.  It happened a few times to my benefit last week.   I’m still carrying a lot more risk than appropriate.   I certainly don’t have the cure for freezing up (since admitted trading is not for me).  I remember reading if you are going to be successful you have to trade in the day-trading industry.  This may be true at times; but, the market has shed many hopes and jobs over it’s history.    Predefined trades were a mentioned remedy.  In my opinion it is helpful to set a stop loss up beforehand with a profit target (a set price to get out at).   My timing was rarely in touch with the market. Well that didn’t work out.  It appears as long as wall-street takes write off and has oversea’s exposure they may do very well.    Provided we can make friends in the world.   I say we work to improve the worlds poorest by giving them all chickens, lambs, and plant-able crops.  Might be better than using guns and bombs.   Went long INTC ahead of earnings with 90% of their revenue occurring over seas.

 I since pulled the trigger and moved into INTC ahead of their earning tomorrow.   INTC gets 90% of their earnings overseas and I think this will be a big plus in the earnings report and send a lot of money into the stock.  The trade did not work as the market looked forward INTC reality coordinated with the world slowdown.  Another lesson from the books everything goes down in a bear market; even the leaders.

Entertainment, and education.

January 14, 2008 Posted by | Stock investing links, ideas, and opinions. | , , , , , , , , , , , , , , , , , , , , , | Leave a comment

The stock market should be volatile monday

  1/12/08 Saturday

  Tough week for the bulls.  Most everyone lost a lot of money except the bears.  I am one of the bears; but, wish I cashed out before the close.  Verizon called me trying to get me to resign for another two years as the market closed.  I was a bit too greedy and didn’t pull the trigger earlier in the day and it may cost me.  

You are always guaranteed to lose some premium on an options contract at the open on Monday of an expiration week.  I wish I never answered that call by Verizon.  But, I guess I’ll have to wait till Monday to see what happens.   Verizon must of bought some customer management software like  CRM I am short.   Looks like the product might need some work.   

     I am sure there will be plenty of sellers going into monday with fear riding high for retirees, and the market will be none to accommodating to let them out on a large gap lower.    Could be hundred points  down or up on the open with all the volatility and associated heads games. 

Everyone seems to be looking for more cash and the market is trying to do the shakedown the best it knows how with a crash.  Must be that trade deficit catching up to us.  Disappointing the market is supporting drug, health care, and hmo’s.  I would think that the all seeing market could figure out socialized medicine is coming and in the entire nations best interest.

  Look to get in or out at your price on  Monday.  I am sure the market will go both directions.   The one thing I fear more than the banks explaining why they lost so much money.  Is the terrorist making an attack when they see weakness or us being dumb enough to attack Iran.  The world needs to work together.   I sure hope we get a president who invests heavily in solar and brings about a system of socialized medicine.   Its the only reasonable way forward. 

     Pure capitalism was created hundreds of years ago when people thought humans were heathens.   We had no idea how much one human could do or how great a country we could build.  Google is working on robots that can calculate every angle, and think more intelligently than humans while we surf the internet. I sure hope the heathens don’t blow it selling us out to the greedy.  Its no longer the rich we have to fear.  Its the greedy.  The world has enough resources so every hard working American can have a home, two kids, a picket fence, Mercedies, and a college education. 

   The Dow could crash a few thousand points according to one bear investor on t.v.  Maybe or maybe we trade higher this year.  Stranger things have happened.  I hope populist female president wins and sets the world straight.   Life’s to short and precious to be wasted on wars.    The world gets more crowded every day and respect has always been a sure way to stay out of trouble. 

 A lot of funds have set rules that have been triggered by all the weakness in share prices.  So that could provide grounds for going lower; but, the market likes to keep the investors guessing.  Jim Kramer from mad money was constructive about AAPL, AUY (Kramer’s best gold stock).  I like CMED SEED MOS and YGE for bullish trades or investments next week.  I like a short in any retailer.   I may short TIF,  BLK , or QQQQ for a trade.  I don’t see any light for TIF with the high end women already sporting all the diamonds they should rationally desire and the heathens still don’t have any money or lost it this past week.   Market makers are sure to be currently swimming in sells with all the selling these past few weeks; but,  I think they have been waiting for this and should have no problme taking the market where it needs to go wheather thats higher or lower.  

     No important indicators until Tuesday’s retail sales, retail sales ex auto’s, and PPI.  The inflation numbers are going to start moving higher or the balance sheet losses are going to pile up for retailers.  Kramer was making fun of sports retailer that said BGFV could no longer say the were the third largest sports retailer.  The environment does not seem friendly for passing along costs to the shoppers who are managing to make less transactions, and spending less each time.  Good job!  I imagine the balance sheet losses are going to pile up and inflation will stay tame. Lets hope not and the nation realizes they have a diverse region with the population equally distributed 2/3 of the 70 million that is under the age of 30.     Apple a big conference to showcase products on Monday in Europe that has always made the stock move higher in the past.  I think Apple should open much higher given the pull back and the growing number of world wide consumers that would like the new gadgets Apple creates.  Select software companies also appear to have some support  I notice that  some stock seem to be establishing a small base and others look to be heading out of business.  First I want to say it is a miracle that the banks could straighten their balance sheets out.  Society should demand they are as leanant with American tax payers.  Not the current administration, and not unless it is demanded.   Good luck getting the oblivious to notice anything going on concerning their children’s future.   I think the plan going forward is to support anything that America has patents behind and sell everything you can’t patent. Drugs stocks are definitely benefiting.  You would think no one told the investors most major drug companies have pipelines that are at best comparable to the drugs we already have on the market.  How many cholesterol, heart, depression, anxiety, or pain medication can society need.  How many CEO’s can we send to the moon if they would like.  Wake up wall-street!  Wake up America!  Over paying CEO’s is not capitalism its feudalism.  No body wants to live in a world where they don’t know if the money in the bank will be worth anything.   No wants a fixed rate triple AAA top rated fund that only returns half its investment.  

 Mrs. Clinton appears to be turning more populust to get the votes or maybe she is following her heart.   She proposed a 70 billion dollar stimulus package.  25 billion dollar tax rebate.  5 billion towards renewable energy.  That will put a dent in the 500 billion needed to put 90% of the world on solar energy in the next hundred years.  Now if she just gives back the $800,000 Michael Moore states she has received from the drug companies and health insurance companies in his movie Sicko ( A must see for all).  Maybe everyone can health care this century and doctors can still get a few hundred thousand a year in real currency.  Any way sure hope Hillary puts  a few accountants and economists back to work.   We need to reconcile our balance sheets of wealth in the country, eliminate the massive trade imbalance over time, and make some real friends.  Wake up America!!  

January 11, 2008 Posted by | Uncategorized | , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Market maker thoughts on figuring his position

Update (6/15/2008)  The market maker has a wicked control on the market, and should show good profits as GS reports this week along with private firms like Scottrade Securities.)  Market moves with conviction, and revaluation as we find real terms.  I still think beer first, get high 2nd, and lover; then kiss your neighbor if he wants peace; kill your neighbor if he wants war!

At the bottom or top of any market their are lots of sellers (at the bottom) and lots of buyers (at the top) so the market maker is taking the other side of the market and it is in his interest when things get to an extream in any time frame to  go the other way of trader psychology. 

 

 

In the shortest of time frames the market maker is on the other side of any trade that is placed when he can not match orders for a buyer, and seller.   The computer algorithm or market maker is in charge of setting a buy, and sell price for the market regardless if there is a buyer or a seller.   If someone makes a block trade larger than the size of the market you will often see the stock make a print that is outside the offered bid and ask.  Well now you know someone has made a transaction for that amount of shares on the buy side if it was higher, and on the sell side if it was lower.  The market maker has made a deal to take on a larger transaction  at slight discount or premium to the market.  

A successful openings only strategy I learned from Bright Trading is buying or selling major stocks on the New York stock exchange when a stock gaps open outside of a normal trading range.  You could use this strategy on any market; but, Bright felt the other markets were two unpredictable.  Say MER gaps opens 5% higher tomorrow in the morning you could short the stock, and have a trade with a positive expectation.  In theory going on the side of the market maker (the specialist as they call it).  If it gapped lower they would go long the stock looking to exit the trade with in thirty minutes to gain a small amount of money.  In theory the market maker has  alot more buys than sells  at the open on a gap higher so naturally it is in the market makers interest if those people leave the trade with a loss, and if he has other people taking the other side of the trade.  So routinley the stock will trend back towards the mean at least for a quick time to exit with a profit.

 

January 11, 2008 Posted by | Stock investing links, ideas, and opinions. | , , , , , , , , , , , , , | Leave a comment

Balancing Emotions of trading

Balancing my emotions is trading stock is one of the hardest things I personally have had to do.   Balanced emotions are necessary to make good investment or trading decisions.  As the market rallies, and I sit short in my positions that I am losing a lot of money in.  I find my self smiling writing this article.  Hardly the way I felt when I was very nervous about the long position I had a call option yesterday that I worried all night about. Wish I held on to that.  What I take away from that is that I have a negative bias on the market even if that makes me wrong.  I feel more stressed out when I have a long position in the market.  Part of me to be honest is afraid of some sort of a disaster in the world and finds it easier to see the argument for the down side in the market.  Needless to say this feeling needs to be put in check. 

Asking myself a simple question is also helpful.  Which direction would I be if I was the market maker. Is his trade accounting buys against sells   likely balanced or way out of wack.    The market maker is the one guy that can’t lose or the market would not operate.  In recent times I have seen a market that feels like it could fall apart.   Just because the markets are automated doesn’t mean the system can lose money.   So trades will usually go the opposite direction of the emotions of the average trader.   Am I acted opposite of Joe investor? or am I acting like Joe investor?  If acting as opposite Joe investor I probably should have more confidence if I have come up with the trade for good fundamental/technical tools that brought me to take a chance.  On the other hand if I am on the same side of average Joe investor.  i.e. I felt like selling when the market was down this morning becuase the bank of England held rates steady to fight inflation.   I should have felt more confident with my long position.    I should reflect to the reasons I entered the trade, realize the market should move higher because by this point in the sell off everyone is selling and the market maker can’t lose money.  The market maker needs to at least get closer to even on his buys and sells. That’s why markets peak, and bottom when everyone is buying or selling.  The market maker has the biggest advantage at this point if things go the opposite direction.  To do this he must drive the others out of their positions.   So maybe I cracked the alogorythm of the automated market maker.  Good luck balancing your emotions.   Much of the market volatility can be expected as the market maker moves the market to keep his trades balanced.  Here are five (okay eight) quick ideas I am going to try to follow.

1. Stay on the side of the market maker.  Be aware of who the buyers and sellers are in a stocks

2. Only enter the best trades.

3. Be patient.

4. Limit position sizes to an amount I am comfortable losing.

5. Review the risk reward of a trade before making it. 

6.  Use bollinger bands (moving average trading range).

7.  Be more balanced to the fact that the market is priced to all known information.   The future is unknown.    

8.  Reading other intelligent stock trading blogs (Kirk report a top blog) and books.  CNBC seems to be overly biased at times to boost television ratings.

  9.  Work hard, and continue to review my material to make good decisions

January 10, 2008 Posted by | Stock investing links, ideas, and opinions. | , , , , , , , , , , , , , | 2 Comments