As you can guess, my trading activity in the last few weeks was rather unimpressive. This probably explains why I didn’t have many posts, though I’d have to say I had a few ideas worth writing about.
First of all, let me share what actually has been done in regards to trading.
On July 15th I bought 20,000 shares of CPTC at $1.23 per share – thanks to a tip from my OBGYN. Being true to myself, I didn’t do much research other than technical analysis.
The graph looks quite attractive from the technical standpoint, even though it is a “dollar” stock. Significant is the fact that it’s been trading for over 7 years and is still around. In these seven years the stock had 4 very impressive spikes and overall has a very defined support and resistance levels.
Yet, what really got me to even look at the chart of CPTC, was my fundamental outlook on the current economy. With the price of oil being at all time high, it is reasonable to anticipate that alternative energy sources will become very fashionable. One morning, I got a feeling that it was time to do a research and find a few companies fitting the profile. Later that very same day, my OBGYN (and our good friend) told me about CPTC – Composite Technology Corporation. Never claiming to be a Warren Buffett, I didn’t feel I have to understand what does “composite technology” mean and what CPTC does exactly. Brief research revealed that “the company’s core and foundational product is their revolutionary ACCC (Aluminum Conductor Composite Core) cable, which doubles the current carrying capacity and produces a higher operating efficiency that helps decrease power generation costs and meet emission standards. The other two products the company offers are lattice towers and wind turbine systems.” To me it was enough to pull up the chart.
However, it took me another 4 trading days to get back into my favorite short selling mode. The market has fallen quite a bit while I was away and I was concerned about jumping in at the low point. So far, I have been proven right. July 15th was a (temporary ?) turning point, as in the next 6 trading sessions DJIA moved almost 900 points higher. Having lost touch with the market, I just barely wet my feet by shorting PHM and TOL (homebuilders, well known to me). My entry points were far from perfect – $11.57 & $19.26 accordingly, but still seem to be quite reasonable. The one thing that I found very annoying – KBH was (is ?) not shortable anymore. I don’t think KBH was one of the 19 companies protected by SEC (Security and Exchange Commission) against “naked” short selling, still it followed suit with MTH and fell out of my portfolio.
Notwithstanding the above, the “highlight” of those two weeks was a panic, inflicted by the price of Wachovia Bank (WB) falling to $7.80, before bouncing up to not much more secured level of $14-$16. This event triggered our “emergency family meeting” and resulted in transfer of funds to a more sound (at least for now) financial institution.
Be aware of the Bear!
PHM – Pulte Homes Inc.
TOL – Toll Brothers Inc.
KBH – KB Home.
MTH – Meritage Homes Corporation.
CPTC – Composite Technology Corporation.
WB – Wachovia Corporation.
Filed under Trading news, Trading tips by 
I am back from vacation.
We flew from Rome to LA to Tucson, spending just about 20 hours in between airports and planes. It was nice to hit the bed at the end of the trip.
Though, to our surprise we didn’t sleep for too long. All three travelers – I, my husband and our 4 year old woke up simultaneously at 4:30 a.m.
Leaving unpacking for later, I went to check the stock market performance – for the first time in two weeks.
My theory was right (see Trading & Cooking or Cooking & Trading? & Are we in the 5th Elliot wave of Bear Market? posts). 3-yr support line has been easily broken and 5th Elliot wave of Bear Market was formed. Unfortunately, I didn’t participate in the second half of the crushing wave down. Of course it was tempting to gamble a little and leave some open positions to have the cruise paid for on the return. However, I am absolutely convinced that discipline will lead to a nice payout in the long run.
Meanwhile, it felt great not to be bothered by the waves (Mediterranean and Elliot) on the cruise.
Filed under Trading news by
Finally, my patience paid off. The Dow Jones Industrial Average fell today another few hundred points and I got out of DOG (at $65.30) and +VIXGD (at $4.20) just in time to pack our luggage for the trip.
Trading is not an easy thing. Even though I let myself to go away from the computer screen for hours, even days, I am always evaluating the probability of making / losing a lot of money. When volatility of my portfolio is high, I stick around my trading platform; when it is comfortably low, I let myself to concentrate on the previously neglected stuff.
In my opinion, there are just three rules to be a successful trader:
- Not being greedy.
- Thinking ahead.
- Keeping your words (have discipline).
I’ll elaborate on it after I come back from Europe.
Filed under Trading news, Trading tips by
It is hard to say which one comes first. As a trader, I don’t have much time to cook breakfast, but as a Mom, I can’t say NO when kids ask me to make pancakes.
So, here I am, at the kitchen, with the spatula and laptop:
The market seem to realize that there is something more important than Goldman Sachs Group Inc. profit – rising inflation and unemployment rate, slowing economy and falling consumer confidence also count for something. Up to the end of today’s trading session I was torn between taking profit on DOG now and waiting for Thursday’s economic data. Finally, the latter won, and I might have another nerve wreaking day tomorrow.
As you can see from the chart, the DOW is very close to its 3-yr support line. Yet, since I believe that we have entered into the Bear Market (check my “Are we in the 5th Elliot wave of Bear Market?” post.), I expect DJIA to break it. My main concern is, however, that I have to close all my positions by the end of this week, as we are flying to Europe for a two-and-a-half week vacation on Monday.
Would we see that major breakthrough tomorrow?
Filed under Trading news, Trading tips by
If I wouldn’t have sold it too early.
Yep, I got out of NMX yesterday (Monday, June 16th) at $88.17. Today it traded as high as $93.64. Oh, well. I made an easy 3 bucks per share, but left over $5 per share on the table.
In choosing between taking profit on long DOG or long NMX positions (which have somewhat negative correlation), I chose Nymex and it was a mistake. Not because I didn’t get out from DOG, because I didn’t keep both! Mathematics doesn’t work perfectly in the real market and so correlation. Today both positions went up! Dow Jones Average Index fell 108 points (which is great for DOG), but NMX actually gained $2.87.
In any case, the daily balance of my portfolio is at a new high, so I am not complaining.
NMX – Nymex Holdings Inc.
DOG – Short Dow30 ProShares.
Filed under Trading news, Trading tips by
The roofers are gone, kids are taking after-lunch nap and it is unusually quite. Even the smell of roofing tar doesn’t bother me anymore. 5 days in a row, our home was rolling and rocking. All the pictures, light fixtures and mirrors had to be taken off, as they were expected to fall. Now its time to put them back.
Thanks G-d it’s a weekend. With the trillions of things I have to take care of in addition to trading, I easily can take a CEO position in any of the Fortune 500 Companies. It won’t be any more challenging. I remember like a dream the time I spent at CSFB (Credit Suisse First Boston) and Williams EM&T. How easy it was there!
Anyway, since now I am wearing different hats, it’s time to get back to the market.
The end of last week was quite disappointing (for me). As if market decided to follow my nightmare (see http://tradingmom.com/trading-nightmares/), it completely dismissed Friday’s bad economic data and was up for the day. To make it even more painful, $INDU ran over 80 points in the last 25 min of trading to close at +165.77.
Did I miss anything? Consumer Price Index was up 0.6% in M/M change, which to me is a clearly inflationary number, way out of FED’s comfort zone. Meanwhile, Consumer Sentiment Index sank once again. Why was the market up? Was it just because BlackRock bought LEH shares? Well, Bank of America bought Countrywide Financial shares not too long ago. If I had to bet, I’d bet that BlackRock investment is not much better (if any) than that of Bank of America.
Filed under Trading news by
I woke up in the morning from a dream that stock market closed up 296 points. Of course my first reaction was to run to the computer, as market had to open in a few minutes.
Both boys, however, got up at the same time as I did. This slowed me down for a while. By the time I logged in to my account, the market was already up 90+ points.
While I was placing an order to sell DOG (cover my position) and buy V (new position), the roofers’ truck came in. I had to hold both boys while my husband was getting car out of the garage, otherwise we would have been stuck in our house for the rest of the day.
This extra 5-7 min translated into “paper” ($800) off my profit just for DOG. I decided to wait for a bit and market gradually started to come back.
At noon, however, I had a business lunch with the CEO of my Real Estate Company. While adding last touches to my PowerPoint presentation, I noticed that the jump in prices didn’t have enough support in confidence and energy of Bulls vs. Bears. I left without placing any orders.
Filed under Trading news, Trading tips by
I was planning to publish daily posts, but it doesn’t seem to be easy.
Friday, 06/06/08 was full with appointments, so by the time I came home it was late night. It was a pleasant surprise to see -394.64 on $INDU (Dow Jones Industrial Average). The only concern I have, if the US banking system, dollar and economy collapses and inflation goes through the roof, what good does it make for me to have all that money in my portfolio? After all, I live in the US, own a house here and use US dollars to travel.
Anyway, my DOG is doing great, though I still feel bad that I closed my short position in LEH. I wanted to reduce the volatility of my portfolio and did it by covering short LEH and adding shares to long DOG. This probably cost me 75-80% of my profit. To be more precise, I bought DOG at 60.68 and now it is $63.98. Meanwhile, I covered LEH at $46.97 with the current price at $25.57. That results in potentially losing (by not making) $21.40 vs. making $6.60 (I bought twice as much shares than I sold). $6.60/$21.40=31%. In other words, I left 69% on the table.
Believe it or not, this is not the first time it happens to me. Last summer I was shorting BSC, starting in August. I got in and out 11 times, but my timing was off by a few months. As a result, the total of covered short positions produced exactly $0! Considering that my entry points were in the range of $103.00-$114.06, I didn’t do too great by rushing out. As you probably know, I would have had a much better luck by closing any of them this year.
The last one I’d mention from this series (just to get it out of my system) is my MBI shorts, also started last August. In this sucker I even managed to lose $2673.46.
At least with LEH I have a better record, as I was riding it a few times down from $64.5 to $60 and once from $64.30 to $47.73.
LEH – Lehman Brothers Holdings Inc.
BSC – Bear Stearns Cos Inc.
MBI – MBIA Inc.
DOG – Short Dow30 ProShares.
Filed under Uncategorized by
In the falling market there are only a few companies I am still looking to buy on a deep: V, MA, NMX & possibly PCLN. Once in a while I am also checking on prices of GOOG, AAPL and CME. UUP, GLD & $VIX.X options seem to be good candidates as well and I have tested the water in each of them already.
V – Visa Inc & MA – MasterCard Inc apparently are not affected by the raising number of defaults, as individual banks bear the credit risk. This is different from American Express and Discover Card, which are taking hit during the credit crisis. MA traded less then $50 only two years ago. Even a few thousand shares would have been an awesome investment, considering that it now trades over $300 per share.
NMX – Nymex Holdings Inc – is an exchange and most of the exchanges performed quite well after the IPO. NMX performance can’t be called spectacular, but its trading over a year had very predictable behavior within price range of $120 – $135. At the beginning of this year, a new support however has emerged – the stock went down to $90 and bounced bunch of times in between $90 – $100.
This morning I saw it at $85 and couldn’t stop myself from getting in. Soon I’ll know if this was right or wrong. So far it looks like I rushed, as the stock went down to $83.34 almost immediately after that. I still feel OK with my position (at least for now), since the new resistance should be somewhere near my entry point, if this was the real break of support. I’ll comment on it more when I see the next few trading days.
GOOG – Google Inc.
AAPL – Apple Inc.
PCLN – Priceline.com Inc.
CME – CME Group Inc.
UUP – PowerShares DB US Dollar Index Bullish Fund.
GLD – SPDR gold shares.
$VIX.X – CBOE volatility index.
Filed under Trading tips by
Today I had a listing appointment in the morning (I didn’t have a chance yet to mention my “day time” job – Real Estate. Please visit www.FoothillsInsider.com for more info).
By the time I got back home the stock market was closed. Nevertheless, I wasn’t disappointed – DJIA fell 134.5 points and my long position in DOG (Short Dow30 Proshares ETF) became profitable again. PHM, however re-bounced from intraday low of $11.61 to close at $12.19. I am placing an order to buy back the rest of the shares, as this builder might form a temporary bottom formation and give me a chance to short it again a few dollars higher.
The next few days will be very interesting from the technical aspect of analysis. If market continues to slide, it might form that missing 5th wave of Elliot pattern:
DOG – Short Dow30 Proshares ETF.
PHM – Pulte Homes Inc.
Filed under Trading tips by
