Get Money Out

Get the money out of politics. YOU can make a difference.

You can continue to be sheeple or perhaps take that first step

All you have to do is sign the petition then pass it on to your friends.

If you don’t fight for your democracy who will?

  • Obama’s biggest contributor (bundled) was Goldman Sachs
  • Romney’s biggest contributors are from Wall Street.
  • Chairmanships of congressional comittees are now decided on who gets the most contibutions from the sector they govern. (Example Banking comittee – the poll who got the most $ from banksters gets to be chairman)

Want to know more LINK

Last Blog for Week

Back Monday

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Stocks

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

DOUBLE CHECK ALL DATA, I MAKE MORE THAN GRAMMAR MISTAKES


The below Chart is from ETF Digest’s David Fry. David shares the same cynical opinion that Investors411 has on High Frequency Trading (HTF’s) that dominate stock trading.

His Chart shows what happened to US equities (specifically the influence of HTF’s who are “in charge”)

SPY 5 MINUTE

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Market Analysis

Focus on TechnicalsFundamentals & HFT’s

  • “Window Dressing” Rally – This is the last week of the 3rd 1/4 for stocks. Just like the last weeks of so many other quarters we are in rally mode. A major reason behind this weeks rally is window dressing and a reason stock markets should continue to advance until the end of October (Friday). Many of our YSL stocks are outperforming, in part, because of this.
  • Trend Kicking the can down the road on Greece is mana from heaven for HFT’s who can use every news items to execute short squeezes, pump and dumps or catching institutional traders with losing long positions. An extremely strong correlation exists between European and US markets.
  • Long Term Stock Trend - The benchmark S&P 500 (see chart on right side of blog) has spent the entire months of August and September trading below the 50 & 200 day price moving average (red and blue lines on chart) – Any credible analyst will tell you that’s a bearish sign.

Investors411 Technical Forecasting Tools.

  • The PCR rose to +1.13 (Roughly - above 1.25 is getting Bearish and below 0.80 is getting Bullish. 1.00 = same amount of puts and calls. Over last two years the highest for PCR is @1.50 and lowest @0.60 - anything approach these levels shows change likely For more information on PCR LINK) Above 1.00 which makes it a wee bit bullish, but overall = Neutral

The McClellan Oscillator

  • (MO) rose  to +22.95 (Rough estimates =-30 somewhat oversold, -60 oversold, -90 OMG oversold & +30 somewhat overbought, +60 overbought and +90 OMG overbought) Another rally will bring the bears out, but for now = Neutral

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Reading The Tea Leaves

Short Term Outlook

days, week+

  • Both Forecasting tools have shifted to Neutral.  But HFT dominated markets have built up some major momentum  - So chances are we’ll keep moving higher till overbought indicators start flashing a turn around.
  • Financials (ETF = XLF) are the sector to watch. Long term their chart is bearish, like the S&P 500. Shorter term there is a series of lower highs and lows on the chart = bearish. No market rally can sustain itself without this group.
  • Bottom Line for rest of weekBulls still have the momentum, till the MO and PCR reach overbought levels.

Longer Term Outlook

month, months

  • Repeat Same old mantra May 20th forecast still stands. The May 20th summer forecast has come to pass and now we wait to see the Fed’s next move. Add to this Europe is a whole lot worse than previously thought back in May. For the Fed to act significantly – inject more liquidity - I’m afraid we need to see stocks do worse for that to happen.

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Detective

Demystifying and Discussing

Simple Option Strategies


by JS


PUTS


(Note:  I volunteered for this column when I saw no one else did, and I had years of experience using calls, especially for increasing income on stocks I own.  However I’ve limited experience in using puts, but I can see ways they are very useful.) [Mucho Thanks from all of us - editor]

Put options are a way to force someone (the person who sold you the put) to buy the stock at a fixed price, no matter how much lower the price of the stock currently is.

Note: you don’t actually sell it to someone personally; it’s like buying or selling stock. When you sell, someone invisible  (or an institution) is at the other side, buying it.

Using put options

Puts protect you from indecision and accidents.  Example: if you own CROX and want to protect profits, or you just bought it and want to limit your loss in this volatile market, this put can do it.

-CROX111022P27 (Oct 22, 2011, strike price of 27).   Friday CROX closed at $27.58.  If you paid $27.58 and you bought this put at the same time, this is how you stand:

  • Sock price ………………..$27.58
  • Put price …………………..$ 1.95
  • Cost……………………… …$29.53

If CROX drops, your loss is limited to $29.53 -$27.00 (strike price of put) or $2.53, a little less than 10%.  But the beauty of this is that if it drops, you can still hold CROX till Oct 21 before you “put” it  at $27. It could go down to 20 in a bad day, but you can keep holding it in case it rebounds, and in this market, it very well can. If it goes up past $29.53, you are into profit. In this market, if CROX is a good pick, it could go much higher.

The negative: no profit till $29.53.  The positive: you limit your loss to 10%. If you bought CROX at a much lower price, you’ve also protected your profits.

Put option: negative: increases cost of stock. Positive: real protection till Oct 22. And you can hold stock in case it recovers quickly and reaches profit level.

Please note:  The title of this column is “Demystifying and DISCUSSING Simple Option Strategies”.  It is very helpful to readers of Investors411 if some of you who use options, post some comments.

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Current Positions

Below – Investors411  hypothetical portfolio that should outperform the S&P 500

See POSITIONS Section of blog for more on YSL#5.(scroll to bottom)

NLYWill buy back into  this high dividend stock on Dip. The date you have to hold the stock comes up on Wednesday. Since the 1/4ly dividend is usually between 3 and 4% the stock often goes down close to that amount after this date. Everyone expects this so Put’s offer little protection for this incident.

GLD - From Two days ago – (Investors411 did not make this trade) Traders who can handle the risk – a third gap down at open and another  significant fall should bring us to longer term support levels. GLD is at very oversold levels. This risk on trade worked like a charm. Investors411 on trades takes 1/2 off the table after +5% and sets a stop loss at the price the stock/ETF (GLD)was bought for. Let the rest ride. Kudos for whose who made $$$

Traders - The risk on trade has worked and now watch for overbought signs (MO & PCR) as an exit and a reversal of the trend.

Investors - This is a crowded trade, but I think it’s a winner.  Short financials and long small caps or technology. There will be a slightly different price at the open.

  • Short Financials – Investors411 will use ultra short SKF (closed at 78.91)
  • Long technology - Investors411 will use ultra long QQQ (tech’s) QLD (closed at 81.13)
  • It helps that the prices re almost equal.
  • Of course, those who know how to use puts (on financials) and calls (on technology) – this is another way to go.

Exit strategy – I do hope to hold this into the end of the year, but will exit  if it looses over 7% and take some profits after +5%.

Disclaimer I buy everything in the hypothetical Investors411 portfolio. If stock is mentioned and I own it you will know.

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Long Term Outlook

(for US stocks only – not our economy)

CAUTIOUSLY BEARISH*

*Investors411 has 5 different long term valuations - BULLISH, CAUTIOUSLY BULLISH, NEUTRAL, CAUTIOUSLY BEARISH, and BEARISH.

* Everything written in BROWN is a repeat from a previous day(s)

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

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