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Stock trading system using 50 day moving average supports, strong stocks, and market trends

Trend following trading system   Overview 

Make money buying, and selling stocks using a trading system that relies on pre-planned trading rules.  The rules are designed to take advantage of fundamental analysis, money management, technical analysis, and the regular development of trends in the world.  

I created this trading system which was inspired by The Original Turtle’s commodity trading system. http://www.elitetrader.com/vb/attachment.php?s=&postid=928713    I have tried to creat a system that is adjustable to meet many individual needs, and minimal time commitments.

 Buys and sells are based largely on stocks chosen to watch crossing the simple 50 day moving average (DMVA), and the simple 20 day moving average.  These entries are to be made into a set list of stocks following the rules to avoid making emotional trading decisions.

  Portfolio selection rules

The system is to focus on the best growth stocks in the market.  Additionally stocks to short sell can be focused on singling out the worst stocks that can be short sold.   Focussing on stocks with the worst forward looking future to be part of the bearish group to be short sold.

After identifying bull and bear stocks watch you must decide how many stock you want to attempt to manage.  You should look too the time you want to devote group size should be based on experience, time to dedicate, capital available, and personal judgment.  Groups can be selected by one’s self or using a reliable source to cater to one’s experience or lack thereof, and personal choice.   Stocks should normally have a two to one ratio of bullish stocks to bearish stocks to reflect the overall concept that stocks move higher over time.  I suggest starting the system with 4-12 stocks in the bullish group, and 2-6 stocks in the bearish group.

The two groups should be reexamined, and updated every week end, or ever month or year depending on ones choice.  Stocks should be added or removed because of developing trends in industries, changes in technology, changes in leadership,  population demographic changes, politics, natural resource developments, natural disasters, wars, politics, and forward looking changes in revenues and or earnings can lead to trends. A stock can be removed from the list at this time if quantifiable factual evidence exists that may cause a trend to end, or in an attempt to find better opportunities. 

A stock should only be removed if no open position in the stock exists.

Groups’ sizes should be reduced if the current group is proving too hard to manage.  Or the group size should be increased if one has been successful with the current group size, and feels it would be beneficial to add more stocks. 

Rules

  1. Use a set list of stocks. 
  2. Determine all simple 50 and 20 day moving averages for all of the chosen stocks on a daily, weekly, or  monthly basis.   These averages will be used set up trades to be executed.  Also determine all value entry prices.
  3. Buy a unit of a bullish stock at or above the 50DMVA, plus at or below the 20DMVA.  A position should be initiated at the open on the first business day a stock has been added to the bullish group and meets these parameters. 
  4. Buy a unit of a bullish stock previously added to the bullish group when it crosses the 50DMVA on an intra-day move from below the 50DMVA.
  5. Buy a unit of a bullish stock previously included in the bullish group when it is above the 50DMVA + above the 20DMVA then retraces to hit the 20DMVA on an intra-day move. 
  6. For all trades initiated, a second unit should be added at the open two business days later as long as the security has not triggered a sell. If a sell is triggered the trade is done.
  7. If a stock gaps higher or lower breaking through an entry price, still go forward with the trade at the open as long as the gap does not void the trade by reaching the exit point before entry.
  8. Sell all units of a stock when a daily close below the 50DMVA occurs for bullish units. All units should be sold at the open the following business day.
  9. Short sell a bearish group stock at or below the 50DMVA plus no more than 10% below the 50DMVA.  A position should be initiated at the open on the first business day a security has been added to the bearish group and meets the above parameters.
  10. Short sell a unit of a stock previously added to the bearish stock group when it crosses from above to below the 50DMVA on an intraday price move.
  11. Short sell a unit of a stock when previously added bearish group stock had been below the 50DMVA and below the 20DMVA and retraces to hit the 20DMVA on an intra-day move.
  12. Close out all short sold units of a bearish stock at the first daily close above the 50 DMVA at the open the following business day. 
  13. Value entry – buy a unit of a bullish stock when it reaches a value 20% below its 50DMVA.
  14. Value entry – short sell a unit in a bearish stock when it reaches 10% above its 50DMVA.
  15. Exit all units of a value entry stock at the open following a day when a closing price reaches an average loss of 8% or higher on the trade.
  16.  Do not buy any stocks below the 200DMVA. (added rule after seeing recent bear trend, and listening to other successful trader that employs this rule with success.

   

Risk reducing strategies

 

 A portfolio should own no more than two stocks from a specific subsector (i.e. computer hardware) in one direction at any given time. No more than four stocks should be owned at any given time in the same direction that is highly correlated (i.e. oil corporations).

The system uses moving averages as a technical indicator to buy stocks when others are likely to also be buying, and sell quickly when the stock has lost this technical indicator advantage.   The system focuses on only the best opportunities in an attempt to maximize returns, and minimize the down side risk of any position.

   

Unit size

Everything can be scaled down to the point of functioning even if that means investing in one or two stocks.  Adjust the units to no more than 30% of portfolio if possible. Use a single unit strategy rather than buying two units reduce commission charges.  Also, reduce the number of stocks in the focus groups to those with best chances to trend well.  One could just invest in bullish group stocks to avoid paying margin interest that may be associated with shorting stocks, and take advantage of the principal that stocks tend to move higher over time. Stocks move higher over time because of retained earnings, stock repurchases, accumulated assets, increases in productivity and advances in technology.  One should consider only investing in stocks that have been recommended by a pre-determined reliable source if they have a lack of experience, time to dedicate, and or comfort with making stocks selections.

For a higher net worth portfolio

 

A suggestion would be to use under five percent of a portfolio in an individual trade.  Units are to be figured by taking the total dollar value of the portfolio multiplied by the percent determined for a unit.  The unit is to be recalculated every weekend.   The stock must be liquid enough to not have the trades materially affect long term results. Exits can be done in two unit sales on the day a sale is called for if the position size is hard to liquidate in one sale.

   Final Thoughts 

      Stocks make a good opportunity for this trend following system to be financially successful.  This trend following trading system is for your education and or entertainment purposes. This system can be tailored to meet your own ideas, time frames, trading tools, and any other special needs. Business conditions are always changing, creating an ideal situation for trends to develop routinely.  Many trades will have a whipsaw effect because sells will often be triggered shortly after you have purchased. This system is designed to preserve capital, minimize risk, and make the vast majority of profits in a small number of trades that trend much farther.   Most of the work for the system is to done on the weekend and outside stock operating hours.

Entertainment purposes only,
 
 
 

 

November 15, 2008 Posted by | Stock investing links, ideas, and opinions. | , , , , , , , , , , , , , , , , | 7 Comments

Mortgage Solution for the United States

Mortgage Solution for the United States

 

Mortgage problems should be in part fixed with passive permanent grants.  Both local and federal grants should be made available to those that want help. Grants are not new, and have been tailored to meet challenges of our country in the past.   A grant program dedicated too homeowners that want help, and need help would have a positive multiplying effect on the entire nation, and world.  Changes in infrastructure needs, debt levels, population demographics, and sustainability all contribute to the need for more government grants.  

 Vermont a leader in progressive ideas has used a small scale passive permanent homeowner grant in selected environmentally considerate multiunit complexes to the benefit of all Vermonters.  Vermont requires those who want to apply to the program to take a financial education workshop, and also helps people straighten out past credit issues. Vermont is one of only two states in the nation to sustain housing prices in the last year.  The grant would stay in place forever as percentage of ownership in the property supporting the homeowner, home values, the entire community, all with a financial interest, and or moral interest.   

Struggling home owners could use this type of grant to regain their ability to contribute to the economy. Home owners could transfer partial ownership of their home to the grant program.  Homeowners, banks, realtors, appraisers, bondholders, renters, and the entire world would benefit.  Being progressive in dealing with struggling homeowners will help deal more effectively with fluctuations in the business cycle, and allow our government to show its commitment to being thoughtful of all.  

 So much of a home owner’s life goes towards paying the mortgage. This maybe impractical, and unsustainable in part because of increased efficiencies, limited natural resources, global competition, and an aging population.  Resolving this material weakness will be good for everyone, and increase flexibility of our economy to meet future challenges.

Currently small regional banks have been exempt from banking regulation of their mortgage originations.  Banks have relied on the under educated, and under informed customer to be their main profit source.   Enticing people with low introductory rates into products they could not realistically afford in the long term.  The lapse of regulation that has occurred continues to contribute to the housing problem, and now threatens to hurt the entire economy.  All Banks need to be regulated in all areas to ensure fair treatment, and pass along increased efficiencies to society.

Further regulation of mortgage brokers will only work if all banking is regulated.  Brokers’ help customers get into programs created by banks.  If banks can do anything then increased regulation of brokers will be ineffective. Rates of profit allowed should be tighter on brokers because of increased efficiencies in recent years.  Government needs to from time to time pass along efficiencies gained by business/society to the consumer.  Too address and eliminate a weakness of capitalism.  

Rates of profit allowed should be lower in particularly on teaser rate mortgages, adjustable rate mortgages, stated income mortgages, and interest only mortgage programs because of the increased risk to bondholders who take on this debt.  Additionally smaller profits on questionable programs would encourage brokers to put customers in the right mortgage product for the customer.  This can be done by slight modifications to laws already in place by states, and the federal government.

Mandate all adjustments in rates to be indexed to too the federal funds lending rate. Rather than indexes that have the potential to distort adjustments materially higher. To ensure maximum multiplier effects by federal policy. To increase transparency of investments’ in mortgage bond; hence, helping all investors be able to make better decisions.  

Prepayment penalties on mortgages need to be reduced, and morally applied to everyone alike.  I would suggest no more than one year to reflect the increased ease at which mortgages can be created, and to not unreasonable slow down transactions of home investors. To fill a loop that unfairly sets up teaser rate borrowers to large pre-payment penalties that can erode equity in homes.

Passive or active government grant type owner ship in all banking comparable to what is already in place with large federal banks could be used to help banks retain market value, continue to work to improve efficiencies, and better align there moral values with everyone in society.  Government intervention would ensure the sustainability of the banking industry despite continuing unforeseen changes in their role.  Banks need to be better able to make more thoughtful decisions without fear of going out of business.     

Handling this sensitive issue quickly would be prudent to show Americas’ ability to respond quickly to changing information.  Permanent grants can be used by individual states, entire United States, the world, and or any area of human concern. I hope to continue to share my understanding on other issues our nation faces in the future.

   

October 22, 2008 Posted by | American Politics and Policy Ideas | , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

To buy or sell YGE, on the sell off in the solar stock.

YGE ( Update + republish) Wednesday October 8th 2008 )solar is a strong corporation with big prospects for making an impact in the search for sustainable energy in the future.  Yigle has signed many deals that will bring a great value to world regardless of profit margins.  YGE brings out more important challenges of the future in recognizing value to the world without concern for profit margins.   As oil has plummetted in recent weeks with the market.   A great value play is offered in corporations that can deliver enormous benefits to an equally sucessful, and sustainable future.

YGE solar stock is a great value at this price and way over sold.                      Tuesday    1/15/2007    12:30pm

  The company is a top tier provider in Europe that is distinguishing itself by working to become the lowest cost producer.  Conferences are scheduled 16-18th Jan 2008 Photon Tech in Shenzhen China.  Then at the World Energy Summit 21-23 Jan in Dubai.   The company should anounce results sometime in early February.   The company has been mentioned in many blogs as growth stock to be bought on weakness.   I think the market may be bottoming here.   A week latter and lower on 1/21/08  Stocks looked good at $29 and better at $25

October 8, 2008 Posted by | Stock investing links, ideas, and opinions. | , , , , , , , , , , , , | Leave a comment

Day trading, and taking losses

Day trading is very hard.  The work done well is consuming and mentally draining.  Wallstreet tries to make money on every trade, and made a cardinal mistake this life time.  Being overly overlyaggressive, and continually attacking the weak.  That is not using our minds to most effectively.   The long term view, and helping other’s is of greater importance in my mind. 

 

Topstockblog has worked to focus on learning from my mistakes, and growing as a trader. 

(updated old trading notes from January 31, 2008)

Picking my battles, and limiting my losses needs to be the lesson learned.   I still like the short in COF.   The bulls’ made a great argument today.  COF has recently crossed above its 50 DMVA and bottomed with excessive volume around 40.   I could have covered my short with a long hedge.  A straddle would have worked well.  Short sellers  covered, and buyers bought.   The after hours news was icing on the cake for a bull.  Could mark the top in after hours. Rebuy doesn’t start until 2nd half of the year and the debt level ratios were mentioned indicating of more erosion of ratios in my pessimistic hope.  Really interested to see the jobs report in the morning.  More data points are going to make things more clear.  Deterorating loan quality and rising defaults are at the heart of my short sale argument on COF.   It is very difficult to day trade market successfully.  Seven tips I’d like to consistently remind myself of.

1.  Limit position size  – position size is critical to reducing being overly biased and too consumed by a single trade.  My return will be negative in the long run if I add to losing positions and over invest in a single idea.

2.  Focus on  making money in a competitive environment – Look at all angles of a trade.  The 50 DMVA shows you momentum and should adjust perspective to work with the crowd.   Identify who is buying and selling, watch the market for clues, and look for real reasons for a directional move in a stock.  Its not about feeling good or bad about a position.  It’s not about stress or lack there of.   It’s about making money.  “They are who we thought they were!  We let ’em off the hook!” Atlanta Falcons head coach after a bad game.

3. Good judgement is the ultimate winner in any market   I will be confused, and trading will be challenging.

4. Buy low, sell high.    Common sense

5. Sell high, buy low  – Common sense

6. Spread my money out more broadly – near delta neutral or at least a single bet long and short.

7. A percentage of funds in cash ensures flexibility to meet oportunity

8. Set stop losses to get out of a position when a stock does not act as you had hoped.  A maximum percentage loss when you will exit a trade. 

9. Reposition the trade to make extra profits.

 

Entertainment, and educational purposes,

October 1, 2008 Posted by | Stock investing links, ideas, and opinions. | , , , , | Leave a comment

Stock Market review reflecting on past trading ideas, and set ups.

Republish + Update 6/16/2008.   Good stock post covering many stocks with good notes to reflect on for stock traders who focus on BA, GD, INTC, CRM, QQQQ, XL,  YGE, UA,

UA shorting idea worked well.  UA took a big dive this week as its growth expectations                   (Saturday January 19th,  2008)

  ran into a recession.   Trade was a Cramer idea from a few weeks ago, moved with the market trend, preannounced a tough first half next year.

INTC long trade ahead of earnings was a big mistake, entered $23.15 currently at $19 exited near open at $20.   An options straddle trade both long and short the immediate earnings options would have worked.  The stock rallied on IBM’s positive pre-earnings Monday.  I rationalized with INTC having 90% of it’s earnings over-sea’s the stocks current and future earnings would have exceeded expectations.  In hinde site I gather the wide and competive coverage on the INTC the positive effect of the weak dollar had already been priced in by analysts’.   Increased doubts going forward  due to possible economic slowing around the globe caused selling leading to a lower share price .

I shorted CRM last week, and again this week.   I shorted on a mention by Cramer about the stock possible being overpriced.  Cramer from Mad Money mentioned how he thought if the stock showed any signs of slowing at earnings the stock would get taken down big. The trade off his coments did not work the first time without perfect execution.  The market did offer a tiny window to execute the trade profitable.   I  then re-entered the trade Friday as the stock was selling off when the market opened higher.  I am hoping the street is ready to take this one down. Earning should be out sometime mid February.  (exited trade near even, Company sells hope and some people like the stock here  1/23/08)

I entered into a short trade on XL late Friday.  I am around even on the trade so far.  I saw a lot of selling going on in the stock and for good reasons.  Two directors stepped down last month, and  moodies placed some of its CPDO’s fund in junk status.  The fund is a complicated derivatives trade that allowed XL to offer insurance coverage on corporate debt staying top investment grade.  Junk status indicates to me that people are likely to not get paid.  I assume these people will be paid before common shareholders. A lot of selling has gone on these past two trading days. I hope I am not too late to the party.  (rate cut will help the company find balance 1/23/08 update)

YGE long trade I backed out of quickly because the stock just became weaker.  I did exit on a bounce that softened the blow.   I’m not sure if first quarter earnings are going to be up to par; but, sure long term the company is a big winner with top technology. I think the stock currnetly priced around $25 is a good for a long trade.  Timing of the entry is what I am trying to do well provided $24 and change on Friday may have been the best spot to get in. Only time will tell .     (long trade on at $23 hoping for a big rally updated 1/23/08 3pm)

 QQQQ appears to be stabilizing as the semiconductors are acting strong.  A long trade may be called for before another shorting opportunity arises here.    (wish I had more money I would buy some 1/23/08 3pm update)

Shorting war related stocks (LMT BA, NOC, GD, COL, ATK,) posted 12pm  Thursday 1/17 /08  ***The trade is up about 1-2%. Anyone in the previous week was up 5%-10%.  All but one of the stocks is below the 20,50, and 200 day moving averages.   I was hoping ATK was a good opportunity to short.  I found a few reasons on both sides; but staying bearish on the side line because the war stocks are below the 50 and 200 day moving average.  Stocks can trend for a while.  Istill think the United states is in a bearish cycle.  The decline of activity in Iraq could slow propects for future war equipment sales.   ATK was put on credit watch negative by Fitch recently.  A stock offering posible in the works stated http://biz.yahoo.com/ap/080109/alliant_techsystems_ratings.html?.v=1.   debt levels are high to meet needs to buy an information systems and aerospace business unit for 1.31 billion dollars.  http://www.reuters.com/article/tnBasicIndustries-SP/idUSN0825031520080109    The stock is oversold short term.  The deal is flat on already strong earnings for 2008, and accretive in 2009 provided no unforseen cutbacks by the government. The company has state of the art technology.  Possible short term catylsts could be a market moves, breaking out of war, government cut backs, and or election promises.

I will update.

Entertainment Purposes only,

June 16, 2008 Posted by | Stock investing links, ideas, and opinions. | , , , , , , , , , , , , , , , , , , , , | Leave a comment

RTH looks like a good short at the higher end of it’s trading range

Update 6/13/08:  The RTH has risen pretty quickly along with most of the stock market.  I would like to go short Monday 6/15/2008.   QQQQ seems to be my favorite short sale position.   RTH; no real opinion!

(5/29/2008) RTHindex looks like a great short on the bounce higher.  The retailers look to be in trouble with consumers tapped out.  The RTH has alot of stability being an index and offering a small dividend. WMT being the largest stock in the index. RTH appears to be range bound and can be sold when over bought, and bought when over sold
http://biz.yahoo.com/ap/080207/bonds.html?.v=2

Entertainment purposes only

June 13, 2008 Posted by | Uncategorized | , , , , , , , , , , , | Leave a comment

The need to be diversified by Jim Cramer

Being diversified is an absolute must by Cramer on CNBC Mad Money.  As a person that has violated this rule because it is hard not to chase a large return.   To not put all your money in one basket is hard to do.  By diversifying we limit our upside and downside.  This is risk management.  It keeps us in the game.  Cramer advises owning at least five top stocks in five different sectors to ensure diversification.  You have to protect yourself from yourself.  You will lose money if you break your rules.   We are human and not perfect so we need rules.  Frailty of humanity makes us go against stocks.  We need to not be arrogant.    Cramer also advised against ever investing in stock tips because it is either  bad information or could be illegal insider information.    I have watched Cramer for a couple of years.  If you just use a filter to listen to Cramer it is a great show.  Cramer also advises investing incrementally. 

(Friday February 26th update,  any small website is going to contain incomplete information, often biased.   In my opionion any t.v. channel is also going to have bias and agenda as Cramer would.  The world can make mistakes. )

  Entertainment purposes only.  Help others, ask questions later.

February 20, 2008 Posted by | Uncategorized | , , , , , , , , , , , | Leave a comment

Bearish BAC, CRM, TGT, RIMM, NYX,

I am bearish on the out look of the market and being so makes me look for good canidates to short. These are the one I think will go lower.  Again the rally faded today, just icing on a bad cake.

CRM – customer management software — too low of barriers of entry for profits to grow and maintain short and long term

BAC- heavily leveraged to consumer debt,  not being able to find new customers qualified for loans and loan defaults could really crush the banking business

TGT-  highly leveraged to consumer spending and credit, has issued credit to customers to grow sales – reality of lending to people who can’t afford to shop in your store may set in soon.

RIMM-  has patent problems with motorola, three networks shut downs in the last year, lots of competition in the market should hurt margins

NYX – market trading should slow as markets slows with confidence and investors losing money in a stagnant economy.

Entertainment purposes only; help other ask questions later

February 19, 2008 Posted by | Uncategorized | , , , , , , , , , , , , , , , , | Leave a comment

Morals of markets would not matter, if they were not important to liquidity of markets

Markets are best served in a stable honest environment.  People are very willing to trade if they feel the market can be trusted.  With limited trust market trading volumes will decline.  Morals are the set of values that we try to use to guide our lives.    A further look allows us to see it also governs the lives’ of all people.  With bond markets drying up and the less fortunate being caught at a loss.   Moral hazards in the financial sector may cause this specific group to lose value going forward.     Derivatives of mortgages held by some investors called CDO’s (Derivatives  instruments for leverage and risk management purposes) and other securities  have not been kind to it’s holders.  Unless wall-street looks far enough into the future and can bring more honesty into their practices they will drink their own poisonous cool aide.  Warren Buffet commented it was nice to see those who have created poisonous cool-aide for others to drink have to drink some.  Insurance carries who have prospered from the derivative plays will likely suffer from a deterioration in trust slowing size, and number of transactions going forward.  BAC, MER, GS, BSC, and XL all have exposure to financial markets.

  On a positive note world leaders have gotten together to make a commitment to supporting market prices even if that means rigging them…lol  Leaders have made a commitment to move markets in an orderly fashion.   Economic stimulus packages have been passed, and rates of lending are being cut.    Solar corporations look they are expanding and finding needed capital to expand their contributions to the world. FSLR and YGE top solar stocks.

Entertainment purposes only;  help others ask questions later                          

February 15, 2008 Posted by | Uncategorized | , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Nice rally, momentum stocks look good here.

The rally was impressive.  Must say most of this rally has me in tough shape.  I wish I could get this over bought and buying opporunity correct this past week.  Technology and oil seem to be putting a bottom in stock prices to date.  Frustrated about the move higher.  Chart patterns are adding to momentum.   Money moving out of bonds should be a buyer in the market.  I am taking a break early this evening and spending time with the girlfriend.  We are looking forward to some good television tonight.   I like  CALM, MDR, MTW, EOG, and BIDU in the morning.   I like put options in TGT, COF, XL, and UNH 

entertainment purposes only

February 13, 2008 Posted by | Uncategorized | , , , , , , , , , , , , | Leave a comment

Short sold UNH, New York state investigating healthcare insurance fraud

UNH should be punished for committing fraud against it’s customers.  I hope you agree with me in condemning fraudulent behavior that ultimately denies society benefits and wastes.  New York state has launched a probe into illegal practices of Health Insurers.  I think UNH is a good short because of the dishonest behavior that I hope destroys the future of UNH. (update 2/13/08 lost alot of money on the trade – seperating morals from trading short term might be a lesson learned) Fraud has resulted in an inaccurate recording of profits in the past, and should not be allowed in the future.  One example of the alleged fraud New York is investigating UNH reportedly paid $62 on claims they believed should be paid $160 according to a Market Watch Report.  http://www.marketwatch.com/news/story/new-york-charges-healthcare-billing/story.aspx?guid=%7BA6E79417%2D6D6C%2D48EE%2D9DC0%2DBB52F816DB09%7D&siteid=yhoof AET, CI, WLP, WCG or HUM also look tempting to short in my opinion. They are being sold off on fear of earnings going forward in a climate with much risk for the industry as the government looks to cuts costs and eliminate waste.   http://www.reuters.com/article/marketsNews/idUKN1334410320080213?rpc=44   UNH said to be at the heart of the probe  http://www.marketwatch.com/News/Story/Story.aspx?guid=%7b889EB25E-F08F-49AC-AA67-1465E44B9300%7d&siteid=yhoo&dist=yhoo   Doing more research I found Nevada probably the most pro business environment in the world slams UNH saying they committed 130,000 violations from not paying doctors and collecting fraudulent money from customers.  It could face 10,000 per violation equaling 1.3 billion dollars in Nevada alone.  I have heard of stiffing patients; but, doctors?  That is a business model for disaster. http://biz.yahoo.com/ap/080208/nv_unitedhealth_sierra.html?.v=1  Punishing this corporation and crushing UNH stock is best for society.  No more compromises.  As a society we need to condemn those who have chossen to deny us health benefits.  The future is about good decisions; not profits.  An argument against the trade is UNH is a large health care provider with a history of profits, predicted growth, and should  benefit from economies of scale because of the size it’s network of customers. Some may seen UNH being oversold and as a good value.

Entertainment purposes only,

February 13, 2008 Posted by | Uncategorized | , , , , , , , , , , , , , , , , , | Leave a comment

Rimm a short here

Companies Black Berry service is out across the country. http://biz.yahoo.com/ap/080211/blackberry_outage.html?.v=10  Should cause a specific problem for RIMM , and problem could go on.  (update 2/13/08 – Stock is trading up recently.  My trade timing and call have were wrong to date.  The stock rallied with the market.  Investors buying are looking at the growth potential of phone users upgraded to the blackberry handsets.

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

Being too aggressive

Being to aggressive has a negative expectation.   I have to do something to stop being overly aggressive.    I am all in on the RTH 90 put contracts.  I don’t like acting this way.  It seems to be a regular occurrence for me to be overly aggressive.  I need to get this problem fixed or I soon may be on the side line broke.   I told myself before the week started I would invest in the March contracts to avoid total loss.  I will keep working to get more balanced.  I really think the trade has a big upside.  I hope I make alot of money on the trade.

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

New accounting rules and interpretations are said to boost stocks

Pretty questionable stuff; but,  possible effective.    Real estate investment trusts now report using FFO measure regularly.   That takes out the non-cash charge for depreciation.  Here is a report from AVB using the term with regularity.  I have noticed this in all REIT earnings calls.  http://www.reuters.com/article/marketsNews/idUKN0632078220080206?rpc=44

Banks have recently been allowed to take mortgages off balance sheets to meet lending standards to make new loans. ( I stand corrected,  with further research I found banks and other financial institutions have been using this practice for a long time with regularity making it impossible to figure how bad things could get http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/BanksDarkOffBalanceSheetWorld.aspx )   Not good.   This make a lot of sense why bond markets have dried up.   People have no idea how over leveraged banks are because of home loans, and corporate buy outs.  I take from this the buyout market is dead and not coming back any time soon.  That takes a big up side catalyst out of the market.

Builders are writing off the values of land currently in earnings.   This is said to have a positive effect later if the values go up on these lands it will boost earnings.  Builder DHI talked about being able to raise a billion dollars in free cash flow this year.  Wow!  One could make an argument for a higher price on the stock with cash flow like that.   http://www.marketwatch.com/news/story/dr-horton-swings-loss-builders/story.aspx?guid=%7B8DF49C4D%2D6BAE%2D4CF3%2D8D3F%2D7FA1406E5F27%7D&siteid=yhoof

A reinterpretation of how stocks are valued could be a big positive for the market.   This has to be balanced out  with the other side of the argument about a slower economy.   I remember when they changed dot.com accounting interpretations.  That led to a big crash.  More volatility ahead.   One comment that is hard to argue against that people use is how good is your own situation.  People do tend to have a harder time finding weakness when they look at how good their own personal situation is.

entertainment purposes only

February 7, 2008 Posted by | Stock investing links, ideas, and opinions. | , , , , , , , , , , , | Leave a comment

Bear market, Dead cat bounce

 

Dead cat bounce is a bounce off oversold conditions similar to the old addage even a dead cat bounces off the ground before it returns to the ground from a large fall.  Jim Cramer cited this evening that determining the bottom in a bear market is near impossible and the bottom in the market is far from over.  Specifically caused by the redemption of mutual fund holders, and hedge funds getting crushed as commodity prices have crashed in a short period of time causing further redemption of assets in the markets to settle debts. Dead cat bounce is an unsustainable rally that fads.  Who is buying here?   Warren Buffet said the dollar may be worthless in five years yesterday

02/27/2008.  http://www.marketwatch.com/news/story/warren-buffett-says-us-dollar/story.aspx?guid=%7B50CE458A-3BB1-4934-83B1-FB368B0FCD66%7D   Tech giant Cisco with drew guidance for the year.  Then made comments abouts its ability to change with the times. What? I thought they were a telecom fiber expansion play.   Google never has given guidance.  Google markets crap on the internet and people are catching on.  I could see foreign nations not allowing the sale of crap to their people.  Google has taken initiative to improve the quality of products offered.  Oil giant Shell issued some disturbing news that is could not deliver oil promised to the market becuase of security reasons and what it called sabotage of it’s pipelines in Africa.  http://www.marketwatch.com/news/story/shell-declares-force-majeure-nigeria/story.aspx?guid=%7B4AC5EFC0-BDD8-4285-869D-5EABB71CB43F%7D  I think the educated trader just sells the market higher every time it goes up.  The investor takes his profits.  I don’t know who would be a buyer in this market.  

Jim Cramer said the bottom is in.  Of course Jim like any nimble trader or the market me can change his opinion at quickly.  He likes Brazilian stocks.  like AMX and PBR  (update 2/7/08) 

So,  lets take a look at his argument.    Companies are trimming expenses and valued at a lower multiple than a few months ago.   Going forward this makes stock investment more attractive.   Corporations believe the 2nd half of 2008 and 2009 will be good for earnings.   The stock market being a forward looking indicator may dictate the bottom is in.  The vix hit 29 recently.  Meaning stocks volaltility is peaking and may have change directions.    Investors are flush with cash and certainly not going down with out a fight.   Just have to see what plays out.   AAPL  and other stocks may be a bargain here.

entertainment purposes only

February 7, 2008 Posted by | Stock investing links, ideas, and opinions. | , , , , , , , , , , , , , , , | Leave a comment

NYX looks like a good short

Jim Cramer did an interview last night with the CEO of NYX (NYSE) and it sounded like a tough road ahead. http://www.cnbc.com/id/15840232?play=1&video=639480517&__source=yahoo%7Cheadline%7Cquote%7Cvideo%7C&par=yahoo  Increases in volume have been offset by increases in costs.  Volume going forward could stay high or it could drop off.  I think it will decline as the economy slows and with the rise of the Shanghai trading.  After all the last CEO of NYX was fired late last year. Things can’t be great.  CME is getting crushed today because of higher trading costs. I think a short is worth a try.  Upside seems limited and downside could be higher than thought.  Volume could drop off a cliff at some point.

February 6, 2008 Posted by | Uncategorized | , , , , , , , , , , , | Leave a comment

Reasons a recession could be healthy for everyone

1. Forces people to work together to find solutions

2.  Enforces accounting standards  

3.  Looks to the past to find mistakes

4.  Less consumption is good for sustainability

5.  It forces weak competition out of business

6.  Takes uncollectable debt out of the economy

7. Brings government intervention

8. Restores profit rates

A recession applied properly can help to minimize future problems   

entertainment purposes only

February 5, 2008 Posted by | American Politics and Policy Ideas | , , , , , , , , , , | 2 Comments

Extremely Bearish on the market

The stock market will crash in my opinion.  I would play it with a short in RTH, XLF and or SPY.  The market system is broken and not working in my opinion.   Service sector contracted to a reading of 44.6 while analysts estimates were at 53.  That is a serious miscalculation.  http://biz.yahoo.com/ap/080205/wall_street.html .  Any reading under 50 indicates recesion or bearish indicator about the economy.  So service sector America seems to be hitting a rough patch.  Lay off the service employees when things get tight and continue business as usual.  Markets no longer crash because the fed cuts rates, doesn’t pay it’s debts, and buy stocks when they go lower.  Gotcha capitalism is another article on yahoo this morning.  http://marketplace.publicradio.org/display/web/2008/01/04/gotcha_capitalism/  Looks like yahoo pulled the story; but, I found something to show I am not making this stuff up.  Must of aggravated a few too many corporations using gotcha capitalism.   As in put you on hold until you hang up. Charge you fees when you aren’t looking, and get over on you any way they can.  

   A bidder for Norther Rock has pulled out of it’s bid to save the troubled bank. Corporations  true colors come through as they bid for corporations using loans and then back out when they can’t make a profit          http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/02/05/cnrock105.xml 

  I have plenty of loans I would like to back out of.   I’m tired of the government lending money to business’s to get over on me.  Tired of the government paying interest on money that is doing nothing.   Given the world has limited resources and humans are committed to racing to consume all of them.  Interest on idle money needs to be reduced and eliminated as the return on capital reduces.   There are answers and money can retain value; but, manipulation makes the problem worse in the end.   The unfolding of this may take 5 minutes or 10 years; but, it is better to find real solutions early to avoid disruptions. 

 We have large problems antagonizing other nations and not looking for common ground.  We cut are health care standards and military expendutures are out of control.  You can’t call people your enemy and fight wars to solve problems.     Honesty and understanding will always be the solution to problems.   The United States continues to persist that China, Iran, North Korea, Russia and others pos threats to our nation.  That is a losing strategy.  All people have to be our friends.

 Cutting taxes with government partnerships  https://topstockblog.wordpress.com/2008/01/23/lower-taxes-and-government-partnerships-with-corporations-and-people-best-for-economy-funded-with-tax-credits/ 

Standards to demand from you elected officials and new president  https://topstockblog.wordpress.com/2008/02/04/standards-i-am-looking-for-in-a-new-president-and-all-people-elected-to-office/

entertainment purposes only

February 5, 2008 Posted by | Stock investing links, ideas, and opinions. | , , , , , , , , , , , , | Leave a comment

How often does the market offer tradable opportunities?

The market occasionally becomes miss priced.  Using good judgement you may be able to make trades with an above average chance for success.  As a small investor I am trying push smaller advantages. I have learned to modify my expectation for success in stocks to find some success.   I have taken notice of how often successful traders have their money in cash.   Most successful traders keep their money largely in cash. Waiting for the opportunities to make good trading decisions.  I read an interesting article of a large investment trading fund that found only two days all of last year to make trades.  http://www.raymondjames.com/inv_strat.htm   Going to have to work on my patience and education to find success.

entertainment purposes only

February 4, 2008 Posted by | Stock investing links, ideas, and opinions. | , , , , , , , , | Leave a comment

Standards I am looking for in a new president and all people elected to office

Here is a list of standards I hope our new president and all elected officials will try to achieve.  Its more important to find a sustainable, and creative capitalist society with functioning markets than some sort of Feudal society with a non functioning market

Listen to all people

Represent all people

Work to achieve a clean water supply for the world going forward 

Work to ensure everyone in the world has food and shelter

Look to find common ground with all nations

Regulate all markets and enforce minimum standards that provide moral benefits

Look at the need to limit world population growth

Be honest and fair with everyone

Work hard with the interest of all people in mind

Try to find peace and security for all people

Enforce estate taxes and offer early settlement of debts to reduce disruptions to the economy  and the stock market

Use higher and lower tax rates to achieve the most sustainable society

Work more with other nations to maximize world welfare and achievement of minimum standards

Create government partnerships with corporations to be able to reduce tax rates, eliminate debts, and reduce impact of business cycles https://topstockblog.wordpress.com/2008/01/23/lower-taxes-and-government-partnerships-with-corporations-and-people-best-for-economy-funded-with-tax-credits/

Advocate and encourage public trading markets with lower taxes

 Discourage isolation and concentration of capital with higher taxes on excess wealth

Cut taxes funded with shared passive owner ship in large corporations

Act morally

Restate world goals of freedom  and respect for all

Expand the educational achievements and opportunities available to all people

Be considerate and understanding to the diverse needs of all people

Expand health care access to all people by expanding educated professionals

Invest heavily in renewable resources  to ensure affordable and available energy for all people

Prepare for the future

I think John McCain is too inflexible and committed to violence to bring lasting peace.  Romney is too greedy.  I oppose all war and realize terrorists are trying to achieve chaos through world wide human suffering, and wars waste natural resources.  I like that Barrack Obama  is the only candidate who voted against the Iraq war; but, is not afraid to change his opinion with changing understanding of reality.  I like that Barrack wants to help the middle class and less fortunate in our society.  I like that Barrack has not excepted any money from special interest groups.  I do not like that Barrack has been very unclear or lacks the ability to state how he will achieve his goals.  Hillary Clinton speaks of achieving similar solution in the future.  I don’t think rich or poor people of the world want to live in a morally unsound world that fails to manage for the future. Taxing excess profits at higher rates is a realistic solution to paying for past mistakes and short falls of tax collections to pay for are consumption.  Pure capitalism states that humans are better dealt with by ignoring their needs.  This will prove to be a disastorous situation if the world races irresponsible to over consume, no population constraints, and a lack of focus on minimizing our actions.  The government needs to bridge the gaps of what capitalism has created and where it falls short of desirable results.    Sharing world education, forgiveness, managing world populations, security, trade, and minimum standards for the world are key components of achieving a peaceful future.   I feel Hillary and Bill are most capable of finding common ground.  I would most trust a woman (Hillary Clinton)  guided by a man (Bill Clinton) to find the most rational solutions.  Barrack may be young and untested; but, ultimately be best for the nation.   The future will bring reality as we have guided it. The stock markets long term function is only in doubt with politics as usual.

February 4, 2008 Posted by | American Politics and Policy Ideas | , , , , , , , , , , , , | Leave a comment

Bought YGE as it rallies higher

YGE a top quality solar play looks like it might be catching fire again.   The stock is up over 10% this morning. http://biz.yahoo.com/ap/080204/yingli_green_energy_wafers.html?.v=1  

The stock has been stagnate for a while and this sharp move higher may just be what investors have been waiting for to pour into YGE.  I wish I bought it under 20 but; I missed it.   I will be happy to catch part of the ride higher.   The Solar stocks have a lot of investors looking to profit from the environmentally friendly producers that should play a big role in the future. 

entertainment purposes only

February 4, 2008 Posted by | Uncategorized | , , , , , , , , , , , | Leave a comment

Shorted GOOG again

 (Exited Position Neutral on GOOG updated 2/5/08) GOOG is going to continue to trade lower in my opinion.   Selling will continue Monday as the stock is not as attractive to investors.  Many may sell off the stock because it missed expectations and MSFT is buying YHOO.  The Google team is talented and growing.  Take a look at the conference transcript link at the bottom from Seeking Alpha.

  BIDU is taking share in China and can take on searches in multiple languages.  BIDU is going after the search market in Japan. The valuation is way too high given the uncertainty of future profits.  Where ever there is profits competition is sure to rise up.   I don’t think its a stretch to say Microsoft entering the search market buying  YHOO will seriously slow growth expectations of Google. http://www.cnbc.com/id/22947600/site/14081545?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo   Nor is it a stretch that earning could deteriorate as a result of customers clicking less advertising as they become aware these ads are often low quality trying to sell something.  http://biz.yahoo.com/ap/080201/google_ahead_of_the_bell.html?.v=1 I have been in and out of this stock short the past month, and putting my profits backs to work on the news that  MSFT entering the search race buying YHOO.   I think GOOG trades back to $450 sooner than later.    The conference call was mixed.  Google is working hard here is a link to the conference call. http://seekingalpha.com/article/62591-google-q4-2007-earnings-call-transcript?source=yahoo&page=3  Some interesting improvements in expanding different language searches, and a cost per sale option offered rather than a cost per click as a choice of options should boost ROI for advertisers.   Growth in the U.K was only 5% and 9% in the U.S.

entertainment purposes only

February 1, 2008 Posted by | Uncategorized | , , , , , , , , , , , , , | Leave a comment

Larry Kudlow of CNBC negative on the market?

Larry Kudlow is an important commentator from CNBC that brings important news and people to the television to discuss world market news. (Update July 28, 2008.) 

Larry Kudlow is still negative on the market; but, wants to believe in a summer rally.   (Monday July 28th 2008)Kramer talked about news conference disclosing SEC policy enforcement of Short Selling rules already on the book to protect common Americans and assume people of the world.  Stay vigilant Jim Cramer and thoughtful people around the world shall save the rest of the world!!!  

 

Wow, 

Larry Kudlow is scared of the bond defaults  (January 31st, 2008).  At least he seems not his usual confident self.  His audience is negative.    $2.3 trillion municpal market around the country has systematic risk according to a guest.  In my opinion the retirement system of obligations may make it impossible for stagnant areas to pay back the money at some point in the future, and lead to defaults as others recognize these risks. The problems of a pure focus on gr The market is surely going to trade lower tomorrow if the trend is still lower.  Kuldow’s guest talked of funding sources drying up with demise of MBI. Bull’s argued derivatives in bonds bonds is where the value in MBI is .  No-one really knows where we go from here. Pension funds have to hope this is bottom or they will have to sell to meet funding requirements causing a snow ball of selling. 

He also talked about long time economist Pual Vulcur is backing Obama.   Paul Vulcar an economist Larry thinks acts with good judgement will be helpful.  I think Obama is another George Bush with distinct differences.   Obama has some good values that will be helpful to all people around the world.   With some good economists on his side maybe they can bridge the gaps.  I think Hillary Clinton will deliver the better future.  Sure makes me feel better being weighted short the market. 

entertainment purposes only

January 31, 2008 Posted by | Uncategorized | , , , , , , , , , | 1 Comment

Market looks for value stocks

Market looks like it is trying to find places of good value, and avoiding places of high risk.   OIH is up on spreading disruptions in Africa, and the Middle east.  Possible up on the big snow storm in China.   Some places of value I see buying in are AAPL, CALM, CMED, GLD, GS, ISRG, POT, and OIH.  GOOG (Google)  Seems to be selling off with investors looking looking to avoid the downside risk, and lock in profits.    A bit tricky figuring out how much lower Google could trade.   I have been a bit uncomfortable trying to trade, and make good decisions.   I put some money into cash.   I excited my short in BJS.   Just have to keep working hard to find opportunity.

Entertainment purposes only

January 28, 2008 Posted by | Uncategorized | , , , , , , , , , , , , , , | Leave a comment

The world needs to come together to meet minumum standards, feeling bearish

I can’t imagine Google doing very well around the world because of the rise of competition in the space.  It’s advertising’s fails to meet minimum standards of value in my opinion for the current stock valuation.  I like Google as a search engine,  and hope the corporation continues its success;but, the share price could go much lower.  

The market is going lower in my opinion because of changes in business climate due to problems not being dealt with effectively. Be careful, market could go higher on the one week fed rate cut having influence, and another rate cut may be coming Wednesday.   I am looking at CALM, GG, CMED, ISRG on my buy list.   

   My economic understanding leads me to believe stocks will be repriced lower because of current prospects for the world economy.   The government and banks are showing signs of weakness.  No concern  or awareness of the rapid population growth of the world, and related risks that may stem from population growth such as over consumption of resources. http://news.yahoo.com/s/livescience/20080127/sc_livescience/humansforceearthintonewgeologicepoch

(The following are my dogma ideas to help the world economy)

The economy does show many signs of hope with the recent cutting interest rates, military successes, and leader like Bill Gates.  On the other hand we have the largest budget deficit in the history of our nation.  The rise of unsustainable riches and inequalities need to be reconciled.  I have a few ideas to help the United States. Inclduing reducing taxes, and reducing the deficit of the government https://topstockblog.wordpress.com/2008/01/23/lower-taxes-and-government-partnerships-with-corporations-and-people-best-for-economy-funded-with-tax-credits/  ,   I have thoughts to help home owners  https://topstockblog.wordpress.com/2008/01/10/motgage-solution-for-the-united-states/

    People are capable of adding value, cooperation, and forgiveness.  All people deserve  clean water, electricity, food, fair treatment, internet, peace, protected boundaries, t.v.’s, and homes.  Embracing these standards would be helpful to turn around the world.   Yet, people continue to act disruptively.  El Sadr threatening to re-engage in fighting after the cease fire ends.   People from all influences need to come together to meet each others’ needs.  Security and good judgement is the best thing all people regardless of ideology can provide for one another.  http://real-us.news.yahoo.com/s/ap/20080128/ap_on_re_mi_ea/iraq;_ylt=AkS4MpGm1JqKwfb2qejan5RBXYh4   The world needs to use stored wealth to feed, protect, educate, and help all people find shelter, electricity, bathrooms, and maybe t.v.   At the same time wealthy should be able to enjoy their wealth while expressing an understanding of others.  Americans should not over consume or be scared of people around the world.  Excessive profits can be taxed at higher rates.  The U.S has historically had a back-loaded taxation on wealth a death to maximize growth.  When the laws were made people had no idea how long a person could live or how much wealth could be created.  Wealth needs to be passed on in smaller increments.  Possible by creating passive grant ownership by the government in large corporations.  Minimum standards for all people may be able to be met more appropriately.  As a trader and for all the traders that just wanted to have a rewarding career its about value.  Not the profits.  If people make excessive profits because of unforseen world events.   Governments’ with more cooperative, stated, and transparent global welfare standards could add great value to the world.   The governments of the world need to decide to work together and not let dogma get in the way.     People want others to do well and people failing is very counterproductive because of multiplyer effects.   Trade opportunities and transparent markets are most capable of reaching societies potential for prosperity creation.  We need to work hard to build on previous gains from history.   Society needs to bring security to people.  We need to stop giving free checks to people, and let people earn the money they receive.  World bodies need to bring in more regulators to make sure money at high levels around the world is distributed honestly and with good judgement.   We do not want to fight endless wars.   People like to trade and more traders will help provide liquidity to world markets.  Trade thrives best when everyone is confident in each other and minimum standards are met.   

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January 28, 2008 Posted by | American Politics and Policy Ideas | , , , , , , , , , , , , , , | Leave a comment

Shorting ETF’s from SeekingAlpha.com, Great website for stock market information

Seeking Alpha is a great website.  The site has lots of traders offering quality stock market information.   I just read an article thats answers alot of questions about shorting stocks.  The article suggest shorting QQQQ and SPY ETF’s if you were goign to try and short a stock.  I found the article very helpful.

http://seekingalpha.com/article/61431-shorting-etfs-goodbye-to-the-old-risks?source=d_email

January 27, 2008 Posted by | Stock investing links, ideas, and opinions. | , , , , , , , , , , , , | Leave a comment

Tips on getting started in the market

  1. Learn about the market before you invest your money or start small 
  2. Stay away from Penny stocks
  3. Find high growth stock that could move up quickly
  4. Only buy stocks at a discount
  5. Open an account with only the highest quality brokers.  I am happy with Scottrade Securities.
  6. Open a margin and cash account if possible.  The interest you pay on margin is hard to overcome.  By having a cash account you can use that mostly, and the margin account when you want more leverage or to short sell a stock.  Stocks trend higher over time becuase of earnings, accumulated capital, and new technology so not many shorting opportunities are available.  Only look to short the very worst of stocks at over bought prices.
  7. Set stop losses for positions.  Don’t add to losing positions. 
  8. Read as many articles, and books as possible. I read a few books from the library when I didn’t have money to buy a book.  Jim Cramer has written several good books. Find a book on technical analysis. Read a book or take a course in economic theory. 
  9.  The  Kikr Report http://www.thekirkreport.com/ is  a great website to keep in touch with the market, and learn more about the stock market.   I would recomend becoming a member.
  10. Turn off CNBC they are not your friends. Too easy for anyone on the shows to manipulate you for financial gain.  That is the advice as have recieved from other professional traders and my experience.
  11. If you don’t have much money find a job or career to accumulate money.  Trying to work ful l time and invest actively is too diffucult.  Adopt passive trading rules to keep you interested; but, not uncomfortable. Things can change in a moment and you have to develop your feel for trading over time. Open an account and start with the idea of earning a small amount or gaining experience. 
  12. Patience and good judgement are the quickest way to achieve good results. If you are short on either try to work on these skill sets. 

January 25, 2008 Posted by | Uncategorized | , , , , , , , , , , , , , | 1 Comment

Market going to test the lows again, bearish GOOG

With some people just not understanding why things could be better with compromise I believe the stock market will crash.  The key to my hope and change to optimisism was the market appeared to be getting it that we are all in it together.   Bill Gates being progressive trying to help the impoverished.  The house introduced a bill to restate the governments responsibility to everyone.   It hasn’t been passed yet.  The can’t move forward if people think the goal is to try and get over on one another. 

The rate cut could make a difference if people have faith in the value of a lower interest rate to banks.  Not sure it will work yet.  Customers may not be as quick as they were last time to go for lower rates.  So the one week effect of rate cuts boosting stock prices as seen in the past may or may not show up.

The smart ass comments back in the mix from CNBC reporters about pure capitalism is the answer and always has been is very concerning.  The world again realizes these guys’ don’t get it and might just never get it.  Until they do get it.   I am staying bearish.  An additional rate cut should make things interesting; but, when used as a tool to get over on people can’t possible be the answer.

  I like a shorts position in GOOG especially http://biz.yahoo.com/cnbc/080125/22841725.html?.v=1   I think Google has very specific to google problems pitching ads for mostly crap, and competition is coming quick.  I have just added the kitchen sink to this trade.  Also shorted BJS an oil servicer with 70% of it operations in the U.S because the United states is running out of oil, and oil should be peaking with Solar stocks taking the lead.  Dubai’s 15 billion dollar emission neutral city could be a sign oil has peaked.  OIH, GRMN, QQQQ, XLF, MSFT, MRK, XL also look like tempting shorts. 

Entertainment purposes only

January 25, 2008 Posted by | Uncategorized | , , , , , , , , , , , , , , | Leave a comment

Stock market Buy!! or Sell!! humor

stock-humor-buy.jpg

January 23, 2008 Posted by | Uncategorized | , , , , , , , , , , , , | Leave a comment

Lower taxes with government partnerships would make corporations much more competitive. Funded with tax credits.

 Given the size of these corporations and importance of operating with a more competitive tax structure.   As an economist I would suggest lowering tax rates from to as low as 15%.  This can be down with the government taking grant style permanent ownership in  corporations funded with tax credits for death taxes.  People could more effective plan their estates without having to make disruptive transactions of their assests before death while settling all or part of their tax burden.   A lower tax rate and partial ownership  would  be most appropriate to allow the government to reduce the tax rate on corporations. 

Private industry needs to become more competitive with lower tax rates and maintain an understanding of good morals.

Government passsive grant style ownership in corporations will help to keep markets competitive and  share risks with business in times of uncertainty.  The government could do this with any corporations and reduce stagnant money.  Greatly strengthen the balance sheet of the United States government.   Imbalances and risks need to be spread out more evenly between business, citizen’s and the government.  Government ownership clearly works to share risks with everyone.   Government involvement can guaranteed operation of businesses and rates of profit regardless if profits evaporates.   Sharing of risks stands to make society more insulated against changes in the world and esasier to make the most appropriate  decisions.  This should be done with the goal of maximizing benefits to society.  

   The influence of money is too strong and sometimes acts in appropriately.  Not creating the most efficient economy possible.   China will crush U.S citizens and corporations with  trade surplus’s and 15% tax rates.   Trade imbalances need to be eliminated over time and concern for everyone needs to be shared.    Tax rates need to be lower to encourage investment, competiveness and a debt free society.  No  more business as usual.  Honesty and hard work is the American way.   Technologies created by corporations should be profited from and shared robustly with the world to minimize waste and optimize economies of scale.             

entertainment purposes only,   

January 23, 2008 Posted by | American Politics and Policy Ideas | , , , , , , , , , , , , , , , , , , , , | Leave a comment

Tricky market, shorted RTH on the pop higher

(Exited  trade because the rate cut will has a positive effect on earnings with the Refy business coming back.  HD and LOW look best in the group. Updated 1/23/08 3 pm )   Retailers trading up today.  Not sure why in this bear market; so I took the oppotunity to short the RTH index.  Not sure about the market direction from here.  I would guess we continue lower.  I am still in my short on CRM.  I exited the XL trade because the stock was already sold off, and buyers started to come in as they did with MBI scaring me out.  XL hit a low around 36 this morning.  May well have been a bottom as the Fed cutting rates should allow business’s and homeowners to find some ways to save money refinancing.  I wish I would have tooken the plunge long into YGE on the open around 21-22

entertainment purposes only

January 22, 2008 Posted by | Uncategorized | , , , , , , , , , , , , , , | Leave a comment

Stock market crash humor

comic2.png

January 21, 2008 Posted by | Uncategorized | , , , , , , , , , | Leave a comment

Whats on sale in the stock market?

(Update July 11th 2008)  The market appears to be oversold.    Topstock blog recomended shoring XL and others stocks six months ago.  The corporations that can survive this down turn may become buying canidates.  I am liking XL an insurance stock with alot of assets and cash.  XL will pay out a dividend of over 7% with XL plummetting in value over the last year.  

I believe the market is trying to get where ever it needs to quickly, and the Fed’s leader Bernanke is very aware of what is going on.  Some assets were overpriced forward looking.  Sustainability and surrounding morality issues are in my mind.   A few stocks are tempting at current prices. I might buy CALM because it is oversold, starting to act well, and my favorite sustainable growth story.  CMED and YGE look tempting to buy particularly with China’s sell off Monday.   All stocks may open lower making for a good entry point. Things in the world are getting more tricky with the sell off over seas.  Trying to be careful.   I wish I could of got into GS at $187 this past summer.  $187 for GS now looks not as tempting.   Too many people still want to buy into this market from my bear market point of view for stocks to stop declining. 

On the other hand  corporate America is healthy and stocks could rally when the Fed cuts rates.  I just read an article from Ben Stein about the market not being a bad time to invest.  http://finance.yahoo.com/expert/article/yourlife/62337;_ylt=ApROSGTguIHTte4UKci.aqa7YWsA  Overseas markets are getting hit hard Monday on fears about the recession in the United States. U.S. markets are closed in honor of Martin Luther King.   

Mcdermitt  (MDR) a top infrastructure builder around the world looks to be a good value around current prices.  Apple (AAPL) showed off a new micro laptop at Macworld.  I thought it could becom the next big hit in a few years if they could get the price affordable for average consumers.

January 21, 2008 Posted by | Stock investing links, ideas, and opinions. | , , , , , , , , , , , , , , , , | Leave a comment

Shorting opportunity in XL

(Update July 11th, 2008)  XL shorting trade worked out well.  That being said the market maker looks to be holding inventory in the low 20’s and may move the stock higher out of this double bottom at least in the short run until more clarity over the future business prospects of XL are more clearly stated in upcoming earnings reports. )

XL is an insurance company that had some of its debt cut to junk on Wednesday by Moodies.            Friday  Jan 18th,   2008    3:30 pm

Last month an article said this would be disastrous for the company when they were put on watch by Fitch as two chairman stepped down.   The company has exposure to homeowners insurance among many other problems areas of the insurance business model.  The company should have a hard time going forward.  The limited time this company has had in the spot light over its exposure to the housing market indicates to me an opportunity to short unexploited.  Company breaking out lower of a consolidation pattern.      The argument against this trade is the company has alot of cash, earnings, and assets to offset the losses.   Earning come out in early February and  I hope will put a big dent in the share price. 

http://www.reuters.com/article/marketsNews/idUKN1627979520080116?rpc=44

  http://biz.yahoo.com/ap/071228/xl_capital_chairman.html?.v=1

entertainment purposes only

January 18, 2008 Posted by | Stock investing links, ideas, and opinions. | , , , , , , , , , , , , | Leave a comment

Past thoughts on CRM

 

(January 18th, 2008 –  CRM is trading lower this morning, and I think it may be the beginning of a big move lower.   Friday  January 18th, 2008      10:30 am

  I must say thank you Cramer from Mad Money for the UA information last weak that helped me make the move to short the stock.  I lost a little shorting CRM last week another Mad Money stock from Cramer about possibility of sell off.  Today the market seems to be positioned to take the stock lower when the market is open.  CRM has very little earnings;not good in my opinion.  Growth expectations to high for slow or bear market based on principles of doing more with less.  The competition is coming from all angles.  It is just too easy to duplicate customer management software.   Good customer service, followed up witha letter, and a couple of phone calls over the next year is not worth billions of dollars.  Not saying that’s all CRM does; but, you get the point.   INTUjust entered the market with a simple customer support  service that customers can call to get help.   The article pointed out other competitors CNQR , INTU, OMTR,TLEO,SFSF,N,PAYX.  It also mentioned GOOG in the article not as a competitor; but, as a source of new business for the sector.  I can see GOOG is looking to grow to move into the sector with the low barriers to entry.  Google has good street cred as Cramer would say when it comes to delivering a friendly product that makes investors mullah. –Some adlib–

   Pricing pressure in customer management from advertising or lack ther of.   To other anticipated slow downs that can hurt. , business cutbacks,  and churn should all erode CRM’s future hopes.  At least that my opinion.   http://www.forbes.com/2008/01/17/saas-recession-concur-tech-enter-cx_sm_0118saas.html?partner=yahootix

            Entertainment and Education purposes,  Edit, Update, Cite Sources, and Help Others.

January 18, 2008 Posted by | Stock investing links, ideas, and opinions. | , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Opportunities shorting war related stocks,

It is very clear that the country should move away from war related spending to balance the budget.       Thursday Jan 17th  2008  12pm

Going forward cutbacks in war spending are the quickest way to balance the budget.  Shorting LMT, BA, NOC, GD.   (updated found others in the industry that may suffer from cutbacks COL and ATK)

 I personally find war appalling and in these time of weakness can make a great short opportunity with good judgement.   The world would me much better represented with a dramatic decrease in spending on the war related stocks.  Shorting LMT, BA, NOC, GD.   War is not a tactic of a moral society, debtor nation, or aging society.  America may and can decide to be a peaceful nation.

             entertainment purposes only,

January 17, 2008 Posted by | Uncategorized | , , , , , , , , , , , , , , , , | Leave a comment

Shorted retailer Under Armor (UA) , stock priced for growth

(Update 10/12/2008 Sunday) Under Armor (UA) is fighting back in a bear market. UA has had success gaining contracts and products in recent months. Check out Thomas Wheisal Conference at UA website. The stock has shown great volatility since my original post in January. UA looks to be settling into a consolidation pattern I suspect will last for a long period of time. — end update–
Being in a bear market Under Armor (UA) a trendy sports wear company seems to be fading,              11 am 1/17/08  Thursday

and the stock is getting beat up.  The corporation has been operating with a negative cash flow, and is going to have to get more soon. It just broke lower out of a consoladation trend and I was able to get short just under$40 .  I hope the stock goes a lot lower soon.  The risk is not much, Bernanke seems to offer no help and I have lost my faith in him.  (Updated 10-12-2008 Topstockblog has regained faith in Ben Bernake and lost faith in Hank Paulson.  Check out the pictures from the G-7 conference to promote economic financial stability October 2008.

Entertainment and education,

January 17, 2008 Posted by | Uncategorized | , , , , , , , , , , , , , | Leave a comment

BUY’s on FXI, YGE, CMED, AAPL, GS,

When searching for stocks, and trading.   CNBC is always hyping one side of the story or the other (Bear Market) or (Bull Market).   It is easy to get confused.  So to watch or not to watch?   I like to watch; but, often wished I didn’t.  If you look hard enough you can find what you are looking for.  That doesn’t make it more true than the other side of the situation.  It is just too easy for CNBC to manipulate the story to expect them not to.  After all they represent a corporation dedicated to making money G.E.  I demand higher standards.  It’s not until average Joe is able to demand standards before we will get them.  I hope to do my part with my blog.

      I was a little disappointed when the friendly cute lady on the show was stopped from talking about problems in the market on Monday when it was rallying.  Confirmed my suspicions CNBC was actually against independent reporting of the news.   

I wonder how long ago China, Dubai, and India figured this out?  Too bad they might just be playing the same game.  Well with higher standards we can make sure we live in a better world.  Higher standards for drug companies, government oversight, honesty, quality of life for all, clean water tables, jobs, and a sustainable competively priced stock market are all achievable.

Any way I am going long the stock market at todays prices.  Top companies are buy out targets for over seas companies. I am taking a shot with the against the grain trade.  Getting aggressive ahead of option expirations this Friday.   I like FXI, YGE, CMED, AAPL, and GS here. 

I am working on an add on about fixing the American economy permantly.  Going to finish it up and send out the senators.  That could give the market reason to rally….lol           I’ll post it on the blog when I finish up.     I will be sending it along to some senators/my congressman and hope others will help.    

                                                for entertainment purposes only

January 16, 2008 Posted by | Uncategorized | , , , , , , , , , , , , , , , , , , , | Leave a comment

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

IBM strong, stock market out look evolving.

I figured the market would either start high and close low today.   Or start low and end lower.  well maybe,     Monday Jan 14th,  2008

Well that didn’t work out.  It appears as long as wall-street takes write off and has over sea’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 do see a few cases for the long side argument one being the market has corrected.   A second reason being emerging markets continue to grow strong.  U.S business’s are benefiting and will continue to benefit from a weak dollar to boost earnings results.  IBM beat the street estimate by 20 cents   $2.80 v.s $2.6 a  share this morning .  I heard an argument on CNBC a few weeks ago that humans will continue to race ahead until all the resources are gone.  Given the weakness in the dollar, and a new president it could be a good year for the stock market.  Value entries are being talked about on CNBC this morning.  A few blogs have also made value entry comments.  I feel more neutral on the markets direction from here. .  I like AAPL, CALM, DRYS, YGE, AUY, and CMED today on the long side.  

I am still short and feeling some pain watching the ticker this morning.  Just happy I have some profits to lose.     I am going to stay short this morning and most of the week if the top is on the open this morning.  If I see the market opens up 100 and goes higher then I will start to worry more….lol     I still can’t find any reasons why the RTH doesn’t go lower.  What could possible save the retailers.   Weakness could be ahead in the markets.   The bank of England has not being able to raise cash to save Black Rock bank, and Goldman Sachs is recommending the move to nationalization of the bank.  I heard talk on CNBC of Citi bank not being able to get the money it needs from China and may to have to lay off another 20,000 jobs.  The economic theory there goes why would you save your competition.  That was the argument used by an analyst in reponse to Warren Buffet’s Berkshire investing in MBI and or other mortgage insurers in trouble.  More profitable to let your competition get weaker.     We did turn off our economy six months in front of China’s Olympics, Bejing 2008! (or at least I thought we did)  England is running an estimated 3% deficit, and talked of being in Afghanistan for decades yesterday.  I sure bet the U.S is sorry for not supporting a Soviet take over in the 1980’s of Afghanistan.    I think the pop on the open is good to help the markets re-balance.  

                                Good luck!

article for entertainment purposes only.

January 14, 2008 Posted by | Uncategorized | , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Bank of England moving to nationalizing Northern Rock bank! Organized by Goldman Sachs

Goldman Sachs helping to line up Northern Bank nationalizatin in England.  The article states no private options are viable or available.  They say they can’t find the 15 billion dollars needed to bring the bank to international standards.    Check out this article in today’s  United Kingdom Telegraph.  Lets see how the market react.  It sure helps one understand how bad things could become.  Should put a pretty big scare in the market for good reason.  I can’t imagine governments can nationalize too much.   That means a lot of banks and business’s will be going out of business the hard way with no parachute for the fall.   I give much credit for Goldman’s action facilitating the populism movement should be good for stocks longer term.  Market just needs to value sustainability instead or growth.   Sustainably growth could become should become the new methodology of evaluating stocks.  Goldman looks to be on top of the curve.     Definitely staying short QQQQ and CRM.   Going to be shorting the RTH retail holdings index Monday.  Don’t think any one can save retailers even if they wanted to.  check out the article!    http://www.telegraph.co.uk/money/main.jhtml;jsessionid=J1D10W44PAXFBQFIQMGCFFOAVCBQUIV0?xml=/money/2008/01/13/cnrock113.xml

January 12, 2008 Posted by | Uncategorized | , , , , , , , , , , , , , , , , , , , , , , , | 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

Staying Short CRM, and QQQQ. Most stocks look good to short here

Given the weaknees in the market, and a number of competors in the CRM (customer management software) sector this stock should tank.  I first took the idea from Jim Cramer’s Mad Money last night about  CRM stock being priced to achieve perfect earnings given they have very little earning and a stoc multiple in the 100’s.     I bought the Jan 55 option puts.  It can take a long time for big shareholders to get out in a stock and the stock has been selling off as the market trends lower.   The stock has crossed below the 50 day moving average which should bring more sellers into the picture.  Besides insiders never miss a day to sell the stock.  Check out insider sales on yahoo finance.  Automatic sales take place just about every day according to yahoo’s stats.  
 The market maker does appear to be accumulating  alot of shares and supporting the price.   
On the QQQQ trade I can’t see any reason why the index won’t go lower.   The only thing holdnig up the market here is the drug index which is the worst index of them all long term.   With so many drugs going off patten and the number of available drugs can’t support these multipes.  Personally I and about four billion people in the world are in support of socialized medicine the stocks have a large downside risk if things go any other direction than perfect adding to QQQQ’s loss.   The growth prospects in the U.S are shot.  Bulls only hope in my opinion is that Wallstreet begins valuing sustainability and rationalizes I higher multiple accordingly.  After all a company worth should be based on the long term rate of return.  Rather than the growth rate until the next blow up.  The market is resilent and the guys on wallstreet are the brightest.  I’m staying with the down trend and QQQQ is a pretty safe way to do that.   QID is a leveraged index to play stocks short for those with no other options to get short stocks.   I hope to post a few more leveraged funds for those that want to be a touch aggressive.
     Bill Seidman the man who fixed the savings and loan crisis in the 1980’s was just on CNBC saying the current situation has similarities to that of the 1980’s.  That should surely fuel the fire as more investors wake up to reality of a full blown recession.  Defaults  should keep rising, credit tightening, and the stock market being a forward looking indicator heading lower.  I will continue to go in and out the market shorting the market.    Steve Leisman pointed out today that software stocks are vulnerable in 2008 with 30% of Ceo’s saying they would cut back on CRM software if they needed to cut back on spending due to weakness in the economy.This article is for entertainment purposes only, not investment advice.  Do your own research and only make educated decisions when trading

Now you add in my brother in law works in the sector, and he said he was expecting a flat year for the sector.  Hardly a situation that a hi growth company can be overly successful in.

CRM could go up on the other hand because it has recently sold off, and is obviously the stock is over priced because investors pay for growth, and buyers/sellers set the current price.   Kramer did say the risks were 10 points up and 30 points down. That means it could go up 10 from here.   Always remember to look at the other side of the trade, and only take the best opportunities.  Rember this site is so you can learn from my mistakes as well as succeses. Good luck

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

Economic policy to keep America strong in the face of a bear market

 Economic policy to keep America strong in the face of a bear market

The government needs to cut taxes, liabilities, and debt to stay competitive in the global marketplace. To pay for these tax cuts the government should offer to settle estate taxes early for those over the age of 65.  Also, possibly negotiate the settlement of retirement benefits to reduce estate taxes owed at death for the many retirees that don’t need the money. 

The rate of profit a business is expected to return in the future declines because competition around the world competes at higher capabilities.   The government currently carries idiotic large debt loads because of the inappropriate influence of money. The budget needs to balanced and idle money needs to be taken out of the market. Many municipalities and local governments will default at some point in the future with higher borrowing costs, high debt loads, and stagnation. 

The government should work to reduce medical payments paid out through government programs.  This can be done in part by expanding the number of specialized doctors around the country. To meet the growing demands our country has for medical care and ensure competition is competitive.

Greatly expanding the number of doctors in training admitted to doctoral programs is essential to making this happen.  The supply of specialized doctors has been limited by Universities whom I speculate have received large contributions from alumni to unconscionable fail to expand the number of doctoral training programs needed to keep pricing competitive, and pass along the gains our society has made to be able to produce highly educated citizens. Government intervention in any area that money inappropriately influences is necessary and key to a moral and efficient society.

Education is the most cost effective way to deal with all the world’s problems and is not something to be feared.  Education programs should be spread and kept affordable to help society reach our potential in life.

 As our capitalist society matures, private citizens have stored up large amounts of wealth, governments have high levels of debt/obligations, and much of the infrastructure we need going forward is already built. As a result, rates of profit will be lower, and the government needs to intervene to ensure moral as well as proper financial decisions are made.

The government can take passive ownership in large corporation or in real estate to settle estate taxes, and allow citizens to maintain control of the properties that they have obtained over their life time. The government can help facilitate business, and greatly reduce the costs of businesses to operate.

Reducing the money supply will take stagnant money out of the economy, and help society adapt to a more competitive environment. The economy can operate with lower margins as society becomes more efficient; additionally, continuing to add value to society.

The reasons why we need to take these actions 

  China is moving deliberately, appropriately, and swiftly to achieve advantage over the United States.   Much of the nation’s problems can be eliminated with the early settlement of retirement benefits, and the settlement of death taxes.   Restoring our competitive place in the global market and benefiting everyone.  The country would be aligning our national interests with all other nations in particular the Chinese, and greatly reducing the risk and or inappropriate reliance on wars in the future.  Trade balance between competitive nations’ are supposed to be equal. In economic theory a nation is supposed to export as much as it imports from a competitive nation.  Over time with the right policies we can find this balance with all nations as we should have been doing so in the past.  It is pure garbage that is our nation’s interest to keep operating with trade imbalances.  

    The Chinese government has recently moved from a communist society to one that is a 50/50 ownership between society and the private citizens.  I assume they chose the 50/50 rate to give both maximum flexibility and to target the best estimate of long run improvement in efficiency over a life time.   China is currently using a 15% rate of taxation on many of its enterprises because they own half of the large corporations. So they achieve the same tax revenue stream as the United States from businesses’ with one third of the taxation rate. This gives Chinese business’s a huge long term advantage that will compound over time. This could result in disaster for our nation if we are unable to achieve a comparable business model.

China has a lot of idle money in United States government securities compounding interest over time, and extending the competitive advantage of China to compete in the world economy.  We must negotiate with China and find compromise. We need to begin to settle these debts for assets reclaimed in the early retirement of estate taxes and become close allies of China working toward the common good.  We have lots of technology to share that will greatly benefit both societies in the long term.

  

We have made huge advances in solar technology, and salt water was recently made drinkable with the use of a special ray of light in a university lab. We need to move rapidly towards making solar technology and all energy saving a bigger piece of the solution.  Finding ways to share these technologies on our terms with other nations can be very helpful in promoting common welfare, economic growth, and sustainability.

A Capitalist model working together with a communist model has the greatest benefit for everyone.   Both capitalism and communism can work together to add the most value to society with the least risk.  A pure Capitalism system pits those with money against those without money looking for no common ground. A pure Communist system fails to account for individual needs and abilities. Pure capitalism produces violent economic cycles with all classes suffering. Pure Communism produces a less productive society.  Money also becomes isolated in pure Capitalism and leads humans to make inappropriate choices. You see this played out in our society as special interests have inappropriate influence over government officials. Causing politicians to neglect the best interests of the people they represent.  In the past, our nation has resisted renewable energy such as the sun, in favor of importing large amounts of oil overseas and causing unnecessary environmental damage, so a small group of people could get unbelievably rich. 

Many American corporations and citizens currently have large buying power, and will lose those benefits without appropriate intervention.    The cutting of taxes, reduction of current/future liabilities, and retaining of purchase power by our nation is in the entire countries best interest. As well as the world we live in. 

 United States runs a dangerous risk of ruining its credit rating at some point in the future, and can be particularly damaging considering will become more scarce in the future.  Sovereign wealth funds can become more dangerous if we become very weak.  Contrary to what you may have been told about a recent purchase of 7% of Citi group by a foreign sovereign wealth fund is it was made in preferred stock. If the company fails, the sovereign fund will own a much higher percentage than when it originally was reported to have taken a stake in Citi Group Corporation.  Keep in mind they paid cash, and if they become more aggressive they could take control of so much more of the world’s technology.  If we try to limit this investment we run the risk of being cut off of natural resources.  China has recently made a purchase into Black Stone group a corporation that specializes in corporate take over’s. This makes it very clear why trade balances are necessary to be balanced over time.  Isolation is not the solution.  United States corporations receive much of their revenue from foreign nations.  Finding common ground is the solution.

 Our dollar has stood as the world’s storage of wealth because of faith our government could always figure out the answer to any problem.  Well that view is being challenged in the mind of everyone because of poor choices, and arrogance.   The world has limited resources available and we need to be mindful of this.

  As the dollar weakens in a pure capitalist environment it would be in the world’s best interest to exploit this and take advantage of opportunity for their benefit.  We need to switch to a government policy model that seeks sustainability and quality of life for all to bring the world together.

 Humans breed like rats in conditions of poverty and that is arguable the most important reason it is in our best interest to make sure everyone in the world has a good quality of life.   Deals can and need to be made to individuals or nations to control the populations as seen in China.  Are poorest citizens having the most the children and our government subsidizes the problem with payments.  The problem grows and gets worse over time.  Instead we should pay the poorest not to have children and share technology in exchange.  The world can live happily ever after with proper planning and appropriate actions as our world become more advanced.

Conclusion

Taking responsibility with these aggressive actions will help us meet the challenges of the future.  By using the most responsible way to handle our debts, and deal with predictable problems that could arise from the financial burden of our debt we will greatly benefit. 

Corporations could better focus on meeting societies’ needs. All would benefit from the increased efficiencies of scale and sustainability.  It’s a simple change switching from that of a growth dominated society to one of sustainability.  The later should receive a higher valuation in the world market.   The reduction of government debt, entitlement payments, and government ownership is in the best interest of everyone.    

Handling these sensitive issues quickly would be prudent to show Americas’ ability to respond quickly to changing information.  This legislation can be spread broadly to individual states, and the nation.   Please share this idea to gain the support of all and find the best solution. The quality of life for the nation, the environment, and the world’s population depends on good judgment.  Please investigate my ideas, and pass legislation early to the benefit of all.  Any one in elected office can win any election with good policy judgment!

  

Resources

  

Trend Following by Michael Covel

2006 by Pearson Education, Inc.

Contradictions of Capitalism & an introduction to Marxist Economics by Lenny                        Flank      Red and Black pub. Aug 1, 2007 

                                            

  

Education

Excelsior College   Bachelors degree in the liberal arts of science with a major in economics and a minor in education

January 10, 2008 Posted by | American Politics and Policy Ideas | , , , , , , , , , , , , , , , , , , , | Leave a comment

Short Sold QQQQ

Be careful, and don’t be long this market are my thoughts.  I cashed in my long position on a QQQQ  I went long based on the oversold condition and hoping the British Central bank would lower rates.  They cited fear of inflation as the reason for not doing so.  Not a perfect exit near the low on the open this morning the QQQQ’s.   Then I resumed my short position as the market came close to neutral on the day. Bill Seidman the guy who fixed the savings and loan crisis in the 1980’s was just on CNBC saying the current situation has similarities to that of the 1980’s.  Bill was concerned if the consumer realizes things are getting bad they may tighten up and make the situation worse. That should surely fuel the fire as more investors wake up to reality. With economy weaknening, defaults risings, credit tightening, and the stock market being a forward indicator I will continue to go in and out the market shorting the market.   The trend is lower. (I giving back my profits on this one)

I should have waited to catch a pop in the market.  With alot of people selling or buying you know there is going to be alot of volatility.  So try to buy low and sell hi. (talking to myself on this one…lol)  with a Crashing the stock market is the easiest way the rich can protect their buying power in a weak economy. Its going to get worse in my view.

January 10, 2008 Posted by | Uncategorized | , , , , , , | 1 Comment

Short Sold CRM, over priced stock in a weakening economy

Given the weaknees in the market, and a number of competors in the CRM sector this stock should tank.  I first took the idea from Jim Cramer’s Mad Money last night about  CRM stock being priced for perfect earnings.   I further found they had very little earnings.    I bought the Jan 55 option puts.  It can take a long time for big shareholders to get out in a stock with low volume.  The stock has crossed below the 50 day moving average which should bring more sellers into the picture.  Besides insiders never miss a day to sell the stock check out insider sales on yahoo finance.  Auto sales have taken place just about every day!!

Be careful, and don’t be long this market are my thoughts.   Bill Seidman the guy who fixed the savings and loan crisis in the 1980’s was just on CNBC saying the current situation has similarities to that of the 1980’s.  That should surely fuel the fire as more investors wake up to reality. With economy weaknening, defaults risings, credit tightening, and the stock market being a forward indicator I will continue to go in and out the market shorting the market.   

 Steve Leisman pointed out today that software stocks are vulnerable in 2008 with 30% of Ceo’s saying they would cut back on CRM software if they needed to cut back on spending due to weakness in the economy.

This article is for entertainment purposes only, not investment advice.  Do your own research and only make educated decisions when trading

Now you add in my brother in law works in the sector, and he said he was expecting a flat year for the sector.  Hardly a situation that a hi growth company can be overly successful in.

CRM could go up on the other hand because it has recently sold off, and is obviously the stock is over priced because investors pay for growth, and buyers/sellers set the current price.   Kramer did say the risks were 10 points up and 30 points down. That means it could go up 10 from here.   Always remember to look at the other side of the trade, and only take the best opportunities.  Rember this site is so you can learn from my mistakes as well as succeses. Good luck

January 10, 2008 Posted by | Uncategorized | , , , , , | Leave a comment

Made a long trade on the QQQQ’s

The downside appears to be limited given investors have been selling for the Nasdaq 8 days straight lower.  Goldman recomended a buy on the drug stocks which is supported the QQQQ that are present in the index.   London is scheduled to make cuts in rates tomorrow, and Beranke is set to make a speech tomorrow. Got in when the Nasdaq was down.   Berkshirt hathaway said they are looking to make a deal with one the current morgtage insurers which should limit the downside move in the stocks in the next 24 hours.  I am hoping a short term bottom has been achieved. Solar stocks also look over sold short term trade set up.  CMED a medical device company with strong growth in China just covered a gap.

Not alot of  profit in trade.  Just looking for a quick gain on the Jan 46 call options.  Taking profit early tomorrow on what I hope to be a pop, and positive close today.   I have been short QQQQ most of the past week.

January 9, 2008 Posted by | Uncategorized | , , , , , , , , , , , , | Leave a comment

Two stocks to buy in today’s market CMED and YGE

CMED and YGE are two top growth Chinese stocks that will benefit from the weak dollar and strong yuan. 

CMED is my top pick for the year a medical equipment company with incredible growth opportunities ahead of it.  The company is growing revenues at over 80% a year with high margin businesses, and recurring revenue. China’s medical care industry is just in its infancy.  Management is proving to be brilliant adding and acquiring new businesses like the closing today on Beijing Bio-Ekon Biotechnology, a fast-growing ECLIA diagnostic equipment for use in all kinds of medical problems including diabetes player in China. The Acquisition is expected to strengthen the Company’s leading position in advanced  invitro diagnostics (IVD) market in China. The Company expects the Acquisition to immediately add to both revenues and non gap net income in the current quarter.

YGE is a top of the line solar growth stock forcasing growth in revenues and earnings at around 100% this year. The companies has analyst targets as hi as $196 over six times the current price.. YGE is gaining the attention of investors, and has pulled back to a good entry point with the sell off in the market.

January 9, 2008 Posted by | Uncategorized | , , , , , | 1 Comment

Stock buying tips for the novice and new investors

Quick Rules to help novice investors and or any one looking to improve their chances for financial success.    

1. Figure out and write down your objectives for investing in the stock market.  Now come up with a short term plan to achieve your goal, and set up a date to review your plans, and make adjustments.  Realistic time frames to make money in the stock market are much longer than I had initially hoped.    Being too aggressive will probably cause you to lose money in the short and long term.  So try to expand your time horizons for making money to longer time frames, and lower you expectation for the amount of money you would like to maket.  Staying in the invetsing game is most important to expanding your chances of being financially successful in the market. 

2. Consider trading exchange traded funds (ETFs).  ETFs funds are highly liquid.  They often can be traded with less stress because you have alot more buyers, and sellers trading.  This keeps ETF’s proportionately more liquid than the underlying stocks held in the ETF fund.  I am currently trading the Nasdaq Power shares QQQQ options.  This market is very liquid and can be very profitable.  the market is most competively priced to perfection 

2. Focus on buying the best stocks that have a history of revenue and or earnings growth, and predictions for revenue growth in the future. The first two stocks I ever purchased went to zero.  Don’t buy something just because you can affford it.  Buy something becuase it is the best value for what you can afford, and balance this with your time frame goals for investing.  Many of the highest growth stocks have hi price tags that are designed to turn away the novice investors.  Better to buy less shares of a high quality stock than a lot of shares of a stock that may have problems they can not overcome like getting financing or growing its customer base.

3. Sell stocks that have revenue declines, and or no earnings.  A stock that has no growth and or revenues are avoided by intelligent investors. This usually leads to a stock being flat or declining in value over time. Be wary of stocks traded on off beat stock exchanges because they often are unrealistically optimisitic about the future and some may be dishonest in their press releases.

4. Define a list of stocks you would like to watch looking for attractive entry prices, and new devlopments.  Continue to learn and keep track of these stocks. 

5. Buy stocks above the 50 day moving average. This shows the stock is trending higher over time.  You can buy a stock on a retracement to the 10 ,20, or 50 day moving average if it is currently trading way above its 50 day moving average.  This will help you from should help you to avoid some of the noise in the market and use good fundamentals to support your chances of sucess.  You can make adjustment in purchasing price depending on how hard you believe it may be to find an entry into what you may hope to be a sky rocketing stock.

6. Make value entries when strong stocks are oversold.  This is when a stock is believed to be oversold and will likely retrace towards the average trading price of a stock like the 50 day moving average creating a good chance to make a profitable entry point.

7. Think about who the buyers and sellers are in a particular stock are.  Is it value investors, growth investors, and or governments.  Use this knowledge to help figure if there are more buyer or sellers.  Look for articles mentioning top institutional funds investing in the stock, insider buying, and or respected people like Jim Kramer from Mad money to be recomending the stock. 

8.  Set a stop loss to exit a trade if it does not act as you had hoped.   Set a maximum percentage to lose on a trade.  Its important to get out quickly with a 5 or 10% loss to preserve your investment money for trades that work well.  Also set up a plan to exit the trade with a profit. Don’t get to gready or take profits to quickly.  I have found it helpful to sometimes sell  or buy half of a position at one price and the rest at another point.  

   

January 8, 2008 Posted by | Stock investing links, ideas, and opinions. | , , , , | Leave a comment