More Put Sells on Falling DOW

AMZN 30 Apr = 4.75 : 6K

Bad DOW day:
==> YHOO 7 Apr x5 > 0.9 : 3.5K
==> VMW 15 Apr x3 > 1.8 : 4.5K

=> AAPL 65 Apr > 6 : 6.5K
IBM 65-45 Apr > 3.5

Another Dow crash

Another major crash for the Dow and Nasdaq early this week. This is certainly a buying opportunity.

Amazon is a good company that has been severely beaten down. Selling puts at 25% below.

Plan:
If option stays OOM (price > 30) - let it expire.
If option goes ITM (price = 30) - either roll down, or if that's too expensive, let it get exercised and add limit-sell-order for sale of stock.

Market Meltdown - Sep 2008

The Dow has plunged more than 800 points today, on the news that the House has rejected the $700B bailout bill.

Luckily I've been out of the market, having been stopped out, otherwise this would not have been pretty for my current "pick up uptrending stocks" strategy!

Take a look at the image below!


Baron Phillipe Rothschild once exclaimed that the time to buy was "when there is blood in the streets". I wonder if this is what he was talking about?

Market Collapse - Financial Sector in Free Fall

It's been an amazing week and half. The financial markets have been in a meltdown, with the implosion at venerable Lehman Brothers and meltdown at AIG, Merrill Lynch and Goldman Sachs, everything has been in freefall since early last week. There was a brief rally at the end of the week with the announcement of a Government bailout plan to the tune of $700 Billion, but it's back down this week.

The freefall downward spiral wiped out small levels of gains from the past two weeks, but my strong money management philosophy helped to limit the damage to very minor levels; I got stopped out of everything with minimal losses.

Staying out of the Market for now; will get back in again when I have free time.

Watch for mid-Sep

Watch carefully: FRED (resistance at 16, 20), HA (crossed resistance at 9.3)

Previous tracking, currently slightly lower: MITI, VRX, NWY, AMGN

New tracking: HOMB, AROW

Updates for mid-September

RKT:
No upcoming company events. News: No major news.
Weekly picture looks great, rises on higher volume, MACD-leading, 50-day EMA leads 200-day EMA.
Daily chart also good. Candlesticks - some downward pressure on Friday, recovered.
5-day chart: consolidation at 44.
Bought: 42.5; Resistance: 44.5; Support: 42.3; Weekly Last: 44.0
Risk: $175

HGR:
No upcoming company events. News: Buys three pt centers with cash on hand.
Bought: 18.23; Resistance: 19.8; Support: 18.5; Weekly Last: 19.21

GIS:
==> Earnings Announcement: Sep 17
Bought: 68.42; Resistance: 69.2; Support: 68.2; Weekly Last: 69.1

CRMT:
No upcoming company events. No News.
Bought: 22.65; Resistance: 23.2; Support: 21.4; Weekly Last: 21.84

Rock-Tenn Co. Ready to Break out?

HGR - if it goes above 19.2, will break out on the upside; start tiny above 18.2, then start pyramiding in as it goes higher. Thinly traded (350K).

AMGN - positive run may be over; may break out higher if it gets over 66.2. More likely to break out lower.

MITI - run up may be over; break out over 7.7 . Thinly traded (275K).

WMB - no longer taking off, support around 28; alert above 32.4, otherwise it's a falling knife

LSR - too thinly traded (43K).

VRX - interesting above 21.

NWY - interesting above 12.4 .

New additions of 52-week highs: GIS, RKT, CRMT

GIS - poised to break out over 68; Earnings announcement Sep 17 . Bollinger Bands tightening. Went higher at End of the week. Clear uptrend over 6 months, consistently higher than EMA. Pick up over 68.4 .

RKT - breaking out on the upside. Thinly-traded (560K). Pick up over 40.5 .

CRMT - interesting over 22.2. Thinly-traded (292K).

---

Chart Links:
52-week highs at BarChart.
New 52-week highs at MSN Money.
MSN Money Power Searches.

AMGN ready for breakout?

HGR - announced it would sell 13.6M additional shares. Price has stabilized lower around 16. Interesting to see where the Friday price will be.

AMGN - the FDA has finally approved its blood disorder drug Nplate. The price is in a tight oscillation around 64, Bollinger bands have gotten really narrow. Ready for a breakout?
Changing buy trigger to 65.2 .

MITI - coming down to Earth, consolidating around 6.3 . Buy trigger lowered to 6.9 .

Screening: 52-week Highs for HGR & MITI

From 8/24

Slope of the line (Rise in one month) for 52-week high-fliers:
-----------------------------------------------------------

LSR: 1.8 out of 35 [5.15 %] { Max: 2.0 out of 35 = 5.71% }
HGR: 1.2 out of 18 [6.66 %] { Max: 1.6 out of 18 = 8.9% }
HNZ: 1.4 out of 52 [2.69 %]
TMO: 1.4 out of 61 [2.30 %]
AMGN: 3.5 out of 64 [5.47 %] { Max: 3.5 out of 64 = 5.47% }



HGR - 17.75
----
Recent 52-week high. Support at 16.6, 15.2, Resistance: 18.4, avg volume: 300K; market cap: 400M, P/E: 26.57
Announcements/Headlines: Beat earnings estimate 4 quaters in a row, next announce: October
Clear uptrend for the last three months, 50-day EMA significantly higher than 200-day EMA and leading.
2-yr weekly chart:
Advancing volume is clearly higher than declining volume. Long uptrends with small corrections.
Weekly MACD leading.
1-yr daily chart: Advancing volume higher than declining; MACD lagging; 50-day EMA significantly leads 50-day.
3-mo candle daily chart: Lots of testing of lower bound; support seems to prevail.
5-day chart: Has gone lower all week, but stabilized by EOW.

====> Pick it up above 18.2; dump below 16.5; pyramid-in and stop-out; max line ~500


First-pass Screening
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HGR, LSR, AMGN, VRX, MITI, NWY

Second-pass Screening
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Comparing returns for 1-yr [MITI, LSR, HGR, NWY], then 3-mo [MITI, AMGN, NWY, HGR], 1-mo [MITI, AMGN, NWY, VRX]

Buy orders set for MITI (7.5), HGR (18.2) and AMGN (66.2).

Back to the Markets

This is the online journal of a reasonably knowledgeable amateur trader.

I have a little bit of background in trading. A few years ago I read every trading book I could get my hands on, including Dr. Alexander Elder, Edwin Lefevre, MacMillan (Options), Jack Schwager, Schaffer, the Turtles and so on. I then traded options for a couple of years with moderate success - profitable, but not enough to make a significant lifestyle difference. My main focus, of course, is on Technical Trading.

For the last two years, I have been out of the market, and am now getting back in!

I like several strategies, but the one I intend to pursue first is the "plunger" strategy. This is a simple strategy of pyramid-in, stop-out, as detailed roughly in the book Reminiscences of a Stock Operator by Edwin Lefevre. Many believe that the protagonist for this book was modeled after the legendary trader, Jesse Livermore.

I'm planning to publish a detailed account of my trading here - not actual numbers, but a blow-by-blow description of general market and sector trends and their impact on general stocks. I'll be listing predictions of the future, and then looking back at those after their time period has passed to gauge their effectiveness.

Feel free to follow along with me, and to add comments if you agree or disagree. I'm primarily writing this for myself, not for generating a readership; if it helps anyone else, then that's a big bonus.

Happy Trading!