The Market Mon

Wow, what a difference 3 days makes!   Stocks started off 2010 with a nice run, and all the broad market ETF's made marginal new highs this past Tuesday.  

Then BAM - the one-two punch.  First punch was the Obama talking about taxing the banks to recover all the TARP money - the TARP money they already paid back!  Second punch was talk about financial regulation where banks are not allowed to trade for their own accounts.  This double whammy whacked financials and took down the good as well as the bad.  Goldman was down 6% for the week (despite record earnings), JP-Morgan was down 10% and lowly Citigroup was down 17% on some disappointing earnings.  For the same period, SPY was down about 4%.

Let's go through the positions.

AAPL - Made a marginal new high closing this past Tuesday at 215.04.  Then the market came in and whacked it down and it closed for the week at 197.75.   On the technical side the stock closed just barely below the lower range band at 197.94.  Volume swelled on this selloff.

The upcoming week is going to be a big one for AAPL.  

First earnings are out Monday after the close and average estimates are for 2.06 per share.  Second is the big Tablet announcement scheduled for Wednesday.  Analysts are expecting something between a tablet with a touch-screen keyboard, and a Mac in tablet form.  On the downside, analysts expect the device to canniblize sales of both the iPhone on the lower end and the Mac on the upper end.  Net result is a wash for earnings but trouble for e-reader makers Sony and Amazon.   We'll be watching but are going to try and hang in there for the long term.

ABVT - The stock is hanging tough and the company announced connectivity with data center companies Telehouse and Equinix (EQIX).   With my entry at $66.70, I clearly top-ticked this trade.  I'm sticking with this trade and I believe earnings will come through.  IBD says "Find support in latest pullback to 10-week line.

AUY - I top-ticked this entry on Yamana, but at this point i'm sticking with it for Gold exposure. It has a very similar pattern to GLD.

C - There's not much good to say about Citi, except maybe that they are turning a corner.  There seems to be more upside than downside, but its going to take some time.  Analysts are estimating profits of 7 cents a share in 2010 and 34 cents a share in 2011.  So from a EPS perspective, they appear to be turning a corner.  Q1 2010 results should tell us whether they are headed in a positive direction.

CML - Still up slightly on this position.  Compellent won the Infoworld Technology award for the 3rd straight year on its SAN storage technology. 

DIA, EEM, EFA, SPY, XLB - All the EFT's got battered this week.   I'm up on SPY, DIA and EEM and down on the others.  I'm an investor now, not a trader so i'm hanging in there.

HMSY - Now loaded up with HMSY on this recent rally which was sharply reversed on the news that Healthcare reform might not be going through after all.  Stock sliced through the lower range band on the daily, but still well above the weekly.  Looking to lighten up on a rally here.

NEOG - No news here, market dragging us down.

SXCI - Pelted by the apparent failure of Health care reform passing the congress.   The stock had a raft of analyst upgrades in the past 2 weeks.  Technically, the stock appears to be rolling over and i'm caught long 100 shares with an entry of $54.12.

USO - Should have taken profits recently at $41, oh well.  Back in the hole again on this position.

XLB - Select sector materials, now up only slightly on this position.

YUM - On a sad note, Glen Bell Jr, founder of Taco Bell died this past week.  He was 86 years old.   "The entire Taco Bell family of franchisees and employees are deeply saddened by the loss of the founder of Taco Bell. Glen Bell was a visionary and innovator in the restaurant industry, as well as a dedicated family man," said Greg Creed, president and chief concept officer of Taco Bell. "His innovative business acumen started out of humble beginnings and created one of the nation's largest restaurant chains in Taco Bell. Mr. Bell introduced an entire nation to the taco and Mexican cuisine."

CD Review

AAPL - Speculation is swirling around Apple's new tablet device.  Details are sketchy, but the device is expected to be the game-changer that the iPhone was for the cell-phone industry. 

It looks like the e-reader category has finally reached the mainstream of consumer electronics thanks to the Amazon Kindle and an endorsement from Oprah. 

On the technical side, the stock is bumping up against an all-time high and i'm expecting a move up to $220 shortly.  Cramer has a target of $300 and many brokerages have targets in the $240 to $260 range. 

AUY - AUY and GLD are now both below the daily range bands, but still positive on the weekly range banks.   On the weekly chart, GLD is sitting right at the lower range bands, so its probably a good time to add to Gold positions if you're a long-term bull.  I'm not in a hurry to add new positions.

C - Financials are rounding a small bottom and downside momentum appears to be waning.

CML - Compellent had a good week last week and IBD points out that the chart has made an entire cup-with-a-handle retracement since its IPO back in 2007.  On the fundamental side, EPS surged 233% as sales rose 31% to 32 million.  For the current quarter, analysts expect a 50% EPS growth with another %30 rise in sales.

DIA, EEM, EFA, SPY, XLB - Despite a rocky last day of 2009, all these ETF's are still looking strong and well above the daily and weekly range bands.   EFA is the sloppiest of the bunch approaching the lower range band.

HMSY - Is the chart of the week, see my separate post on that.

KO - Coke is sitting right on the lower range band and appears to be taking a rest, probably a result of the recent strenght in USD.

MYRX - The daily is clearly in a downtrend since the company's decision to acquire Javelin Pharmaceuticals.

NEOG - Stock continues on an uptrend after recent good earnings. 

SXCI - No news this past week except for a technical alert: "SmarTrend's Trend Spotter Sees Continued Upward Momentum on Shares of SXC Health Solutions (SXCI) - 12/30/2009."

USO - Stock had a crossover on the daily range band to the upside and the weekly chart remains positive.

YUM - No real news, stock is stuck in a sideways pattern.

CD Review

Taxable

LEHMAN BROS FSB WILMINGTON DEL C/D FDIC INS TO LIMITS 5.30% 05/17/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40%  06/21/2010

FARMERS & MERCHANTS BK TOMAH WIS C/D FDIC INS TO LIMITS 5.25% 07/12/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

Retirement

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40% 06/21/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

RG PREMIER BK HATO REY C/D FDIC INS TO LIMITS 5.45% 07/30/2010

With the year 2009 behind us, I'm all to happy to say goodbye to it. 

My overall portfolio returns were miserable -4.99% in the taxable account and and -1.41% on the retirement side.  Even more depressing is the comparison with the SP-500 which was up +23.45% for the year.  Basically, I sold out of my long on the sell-off back in late 2008 and came into 2009 with a high cash position.  At one point (at the March low) the SP-500 was down -24% for the year, and I was down only 9%.  I though I was being so smart staying in cash, instead the market took off and I was late to re-enter.  I finally caught onto the rally in September and got some decent upside price action from there. 

Also on the positive side, my company 401K plan (which have nothing to do with managing) was up 20%, so I caught a nice gain there.

Anyway, below is my target asset allocaiton for 2010.  I plan to transition toward this new allocation throughout the year.  The allocation itself was created by Financial Engines, and deemed appropriate for someone of my age and risk tolerance. 

Under the Current column, the 35% is marked with an asterisk.

That's because its not purely invested in SPY. Instead, its a mix of AAPL, SPY, DIA and YUM.  When and if I sell these, I need to replace them with an equivalent amount of SPY, but keep this category at about 32% of the portfolio.

To Do List

- Add to EFA, VO, IWN on a pullback.  Expect a pullback in this market.

- As the CD's come due, roll into EFA, IWN and DFA International Securities

- Get the prospectus for DFA International Securities and see how I can best replicate it

Resolutions for 2010

- Stop spending so much time trying to pick individual stocks and let the ETF's do the heavy lifting.  Remember dividends are a big part of long-term returns.

- Focus more on the overall allocation then trying to find the next hot stock, or time the market.

- Stop screwing around in the Forex market until I have a proven, researched automated method that's proven to work.  And good luck finding one by the way.

- Smile more, stress less and stop worrying about money and instead just enjoy living my life.

SPY made a new closing high for the year at last Thursday's close

The chart on the left shows SPY with price bars painted pink for bars that made a new 52-week-closing high.

The lower portion of the chart shows a count of SP-500 stocks making 52-week closing highs on that date.

Last Thursday was the 3rd highest day on the chart with 114 stocks in the SP-500 making new 52-week closing highs. This close forms the 3rd lower high in a wedge formation and shows the power of last Thursday's action - even though volume was on the light side.

StockFinder is an amazing tool and this is just a small example of what you can find out with a bit of work and imagination.

Back to positions review....

AAPL had a great week, will cover that stock in a separate post.

AUY - Yamana Gold is weakening a bit.  I'm starting to think AUY is a poor proxy for the price of gold and I should just buy GLD instead.   The only plus is that AUY has a dividend and GLD does not.

C - Not much going on with Citi.  I'm in the hole about 1/2 point with my cost at about 3.80.

CML - Compellent closed at a new 52-week high on Friday.  IBD ran a piece in the 'Stocks on the News' column with a headline "Compellent Clears base in Light Trade".  Analysts are expecting a 50% earnings growth when they report on Feb 10th.  IBD also points out that volume has dried up since its breakout day on 2x normal volume back on Dec 18th.   I'm up about $1.50 per share with my average entry at 22.25.

DIA - SPY made a new yearly closing high on Friday, but SPY did not follow suit.  I'm sticking with it and considering it part of my broad market exposure.

EEM - Emerging Market's ETF fund.  Chart has been withering lately and not keeping pace with SPY.

EFA - This position was added this week in both accounts as part of myself working toward a target allocation which i'll cover in a later post, probably in the coming week.

HMSY make a new all-time closing high on Friday.   No news this week, earnings are not due until Feb 18th.  Company will present at the JP Morgan Healthcare conference on January 11th at 5PM EST.

KO - Coke is basing nicely here and proabably in a good add-to position.  After making a 52-week high back on 12/11/2009, the chart has found some support and is basing.    With a 2.8% dividend yield, and a PE of 21, this stock is looking good.

MYRX - A New York law firm is investigating possible breach of fiduciary duty by the board of Javelin Pharmaceuticals by selling out to Myraid Pharama at the equivalent of $1.50 per share.  Clearly some sabre-rattling going on here with Javelin stock at $1.27 per share.    In the press release, they mention the stock "recently" traded at $2.00 per share (back in September), but since traded as low as just over $1.00 per share.  Trying to goose management into getting a better offer no doubt.

NEOG - Stock is coming up againsts the recent all-time high at 24.34 and the shares are stalling just short of the all-time high.   Going over recent share sales, a bunch of executives sold shares in the fall of 2009, but the shares are up about 12% on average since they sold.  These sales look more like protecting profits than reflecting any underlying weakless in the business.

SPY - Hit a new year-to-date high last Friday.  My target assett allocation indicates 28% SP-500 (SPY) so i'm going to add-to on weakness.

SXCI - Stock make a new all-time high on Friday closing at 55.35.  The health-care stocks have blown above multi-month resistance that has been caused by uncertainty caused by health-care reform now in debate in the US-Congress.

USO - I've been laboring under this position for almost a year now.  I'm tired of paying money to the exchanges to keep rolling these contracts over and paying no dividends.  A much better choice would be sticking with OIH  - Oil Services Holders.  But there is a downside.  If the equity market collapses, OIH will implode while USO will hold up.    Conclusion:  pick a portion of my account that should be invested in energy invest 25% in USO and 75% in OIH.

XLB - Select sector materials - closed just short of a new all-time high.   The sell-off in gold and materials have kept this EFT from falling through the floor.  Need a pure-play on the anti-inflation-anti-fiat-currency-camp and haven't found it yet.  Real Estate perhaps?

YUM - Great article in WSJ.com that I re-tweeted about how YUM is trying to cater to the 18-25 age crowd in with Taco Bell in India.   Need to get polished up on my Twitter-tools.

CD Review

Taxable

LEHMAN BROS FSB WILMINGTON DEL C/D FDIC INS TO LIMITS 5.30% 05/17/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40%  06/21/2010

FARMERS & MERCHANTS BK TOMAH WIS C/D FDIC INS TO LIMITS 5.25% 07/12/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

Retirement

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40% 06/21/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

RG PREMIER BK HATO REY C/D FDIC INS TO LIMITS 5.45% 07/30/2010

AAPL - Stocks is hugging the bottom of the lower range band and is negative on the daily range bands.  Peter Worden ran a video earlier this week showing how AAPL is weakening technically and several indicators are rolling to the downside for the first time since the market lows.  I'm on the fence and long 50 shares with entry just below 190.

AUY - Stock is now below the daily range bands with the big rollover in gold.  The daily chart of GLD has also crossed the daily range bands to the downside today.  I'm in the hole just about $1 on this position with my entry at 12.24.

C - Citi is a pretty wounded animal here and CEO Vikram Pandit is taking some heat in the press for being a bit too hasty in pricing the secondary offering to repay TARP.  In fact the secondary had to be priced below the market and it was so badly handled the Treasury decided to hold off on selling its position for a better price.  Current shareholders are being badly diluted here, but with the ride down from 50 to 3, shareholders are basically wiped out anyway.

BTW - Most of Citi's 20 cent pop on Friday was due to index rebalancing in the SP-500 in which index funds needed to buy a monster amount of Citi stock.  In fact NYSE Euronext had an all-time record in daily share volume on Friday trading 3.2 billion shares in one day.

So what's in the future for Citi?  Probably a 1 for 10 reverse stock split which which take the stock price up to 30 again and then it will get whacked back down to 3 all over again.  Anyway, with my entry at $3.82, this is like a call option with no expiration.

DIA - Not much going on with the major indices with most of the big money players on the sidelines until early next year.  Up about 2% on this position.

EEM - Emerging Markets ETF - not much going on, up about 3% on this position.

HMSY - This chart is a thing of beauty and note how volume on up days has swamped volume on down days for many weeks now.  Tradingmarkets.com indicates continued buying pressure in the shares.

KO - The stock hit resistance sharply at 60 and got whacked back down to just under 57 on increasing volume.  This may be caused by recent strength of the US dollar.  I can't find any other developments in the news that would cause this pullback.

MYRX - The stock had a 6% selloff on monster volume on Friday when Myriad announced it was acquiring Javelin pharmeceuticals (JAV) which is traded on the Amex.   I'm probably going to close out this position to square my tax position and lower my realized losses for the year.

NEOG - Neogen is continuation of a great story here.  The company announced earning of 20 cents a share beating analyst estimates by 1 cent.  The conference call indicates the company has had its 67th consecutive profitable quarter.  The company has had 71 of the past 76 quarters with increases in revenues.    Neogen now has operaitons in the US, Mexico, Europe and China and continues to have great growth prospects with ongoing concern for food and animal feed safety.

Also, the shares split 1 for 1.5. I'm up about 50% and 122% on my positions in this stock

SPY - Similar position to DIA, may take profits for tax re-balancing.

USO - I've been up on this position and i've been down on this position.  In the end i'm right back where I started minus a small amount of premium for options written.  Had I bought OIH (Energy Services Holders) I would be up 30% on this position not counting dividends.  This was a costly lesson although I should mention that OIH is much more volatile than USO and i'm also much more likely to lose 30% on a position in OIH versus USO.

XLB - Select sector materials.  Has cooled of quite a bit with losses in Gold.

YUM - Moved up a bit on Friday in sympathy with Darden (DRI) which had a nice pop on good earnings.

CD Review

Taxable

LEHMAN BROS FSB WILMINGTON DEL C/D FDIC INS TO LIMITS 5.30% 05/17/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40%  06/21/2010

FARMERS & MERCHANTS BK TOMAH WIS C/D FDIC INS TO LIMITS 5.25% 07/12/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

Retirement

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40% 06/21/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

RG PREMIER BK HATO REY C/D FDIC INS TO LIMITS 5.45% 07/30/2010

Start planning for next year's asset allocation now, next year will be well under way before you know it!

ABVT is the chart of the week.  The stock made new all-time highs 4 out of 5 days in the past week.  Friday was a particularly good day on excellent volume.  

On the technical side, ABVT moved up to #25 on the IBD-100 this past week and IBD indicates "6% past 57.03 buy point on after pull back to 10-week average."  On the fundamental side, IBD reminds us that this company has more than 2 million miles of Fiber Optic networks cable deployed.

Unfortunately, I took profits in ABVT at $53.30 and missed the last 7 points of the move so this is one that got away.  I'm looking to re-enter on any type of pullback.  The stock split 2-1 back in September and is up 50% since then. I expect it to run to 80 then split 2x1 again probably by end of Q2 2010.

Back to positions review.

AAPL - This stock is looking pretty sick and has had 2 crossovers of the daily range bands to the downside in the past few weeks.  This week's rally failed right at the upper range bands so i'm probably going to take profits this coming week.

AUY - The rally in gold failed in spectacular fashion last Friday and i'm now in the hole slightly on this position.

C - Citi 's is paying off the TARP with a 20 billion dollar stock offering.  That's good news of course, but further diluting current shareholders, but it had to be done.

CML - Stock is moving sideways, no recent news.

DIA - Up decently on this position but DIA seems to have found resistance right at the 105.0 level.   Nothing new to report here, but most components are looking good.  In fact, 25 of 30 components were above the daily range bands.   The only Dow-30 components below the daily range bands are: DD, JPM, KFT, TRV and XOM.

This ETF is a strategy in itself - just buy DIA!  These are all solid, well-managed companies many with multi-national business exposure.  And with the dividend yield over 2.5% (according to Esignal), this ETF is a winner!

EEM - Emerging Markets ETF.  This fund seems to follow the global equity markets and doesn't offer much in the way of diversification, but definitely needs to be part of every long-term portfolio.  Need to work on the allocation.

HMSY - No news since last week, chart is marking time.

KO - This could have been chart of the week (yet again) and i'm up over 13% since my entry at 52 back on 9/14/2009.  This is a DIA component and is a Warren Buffett favorite.

MYRX - No news this past week and chart is marking time.

NEOG - Neogen is due to report earnings this coming Friday.  This is an animal feed and food safety play.  Its total boring and I love it - up up 50% since my entry back in 2007.

SPY - Similar looking chart to DIA but not as strong.  Clearly evidence that additional money going into this market is going to the blue chips (DIA) versus SPY.

USO - Once again i'm down on this position and i'm unhappy with my energy exposure here. The Fast Money guys on CNBC told me a long time ago that USO is a lousy energy play due to the ongoing cost of rolling over the futures contracts.   They indicate that OIH (Energy Services Holdrs) is a much better play because it represents real companies in the energy space that have earnings and pay dividends.   Looking to build a position in OIH going forward.   What can I say - i'm slow to learn sometimes.

XLB - Select materials - metals took a hit recently, but this one is holding up.

YUM - Stock is marking time and I think is somewhat under apprecaiated at the present time.

CD Review

Taxable

LEHMAN BROS FSB WILMINGTON DEL C/D FDIC INS TO LIMITS 5.30% 05/17/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40%  06/21/2010

FARMERS & MERCHANTS BK TOMAH WIS C/D FDIC INS TO LIMITS 5.25% 07/12/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

Retirement

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40% 06/21/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

RG PREMIER BK HATO REY C/D FDIC INS TO LIMITS 5.45% 07/30/2010

For now, plan your target asset allocation by sector and get ready to start building.  Next year will be well under way before you know it!

HMSY is the chart of the week.  Its coming up on the right-hand side of a nice little cup formation.  Volume has been decent lately with some mild accumulation in progress. Not much happening on the news front.

AAPL - Stock is resting right at the top of the lower band and is definitely threatening to break below the lower range band.  The stock is up only 2 of the past 14 sessions, and volume has been increasing to the downside here.  

Between Microsoft, Google and Apple, its a clash of the technology titans, particularly in the hand-held device space. I'm starting to think that Apple is holding themselves back by not supporting Verizon's network in the US, since its so much better than AT&T's.  They need to adopt the multi-carrier approach that RIMM has done and do it fast. 

By the way - have you seen AT&T commercials indicating how great their coverage is?  Its their lame attempt to combat Verizon's "There's a map for that" commercials.  Come on AT&T, we know the difference between 2G and 3G and those ads are an insult.  But what else can they do?  Wireless networks are extremely expensive to build and Verizon has a huge lead in the US.

AUY - Gold took a hit.  Still up on this position, but not by much.

C - Financials continue to lauguish, and even industry leaders GS and JPM are taking a break.  On the bright side, BAC announced it was paying off TARP which gave the sector a boost and gave BAC a 5x volume surge.  BAC actually crossed the daily range band to the upside Friday, take a look at the chart to your left.

CML - This is a new position this week stock made a good pop with earnings news back on 11/18 and since has been marking time, moving sideways.

DIA - This ETF seems to have found a lid at about 105.  It could be just marking time here which is okay since its had a pretty good run.

EEM - is up 5% since its recent low back on 11/27/2009.

HMSY - already covered above.

KO - Stock is looking sharp and is up 8 out of the last 10 sessions.

MYRX - The company is in phase 2 trials for a drug called MPC-4326 which is is being developed by Myriad Pharmaceuticals, Inc. for the oral treatment of HIV-1 infection.  The stock didn't do much on the news.

NEOG - Neogen purchased the food safety business of a San Diego, CA based company called Gen-Probe.  Stock is good good, slow and steady.

SPY is looking good, similar chart to DIA

USO- Went negative on the daily range bands last week, but still positive on the weekly.  Looking at the chart to the left, however, the last 2 sell signals have been losers, so i'm staying put on the long side.

XLB - Select sector materials.  Took a big hit on Friday with the sell-off in Gold.

YUM - Took a big on Friday with a story that their same store sales are declining in both the US and mainland China.  But they still expect to grow EPS at 10% next year due to 1,400+ new units in YUM China and Yum Restaurants International (YRI).  Clearly not a positive development, but we're sticking with it for now.

CD Review

Taxable

LEHMAN BROS FSB WILMINGTON DEL C/D FDIC INS TO LIMITS 5.30% 05/17/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40%  06/21/2010

FARMERS & MERCHANTS BK TOMAH WIS C/D FDIC INS TO LIMITS 5.25% 07/12/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

Retirement

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40% 06/21/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

RG PREMIER BK HATO REY C/D FDIC INS TO LIMITS 5.45% 07/30/2010

That's it, have a great week and keep your power dry.

Welcome back Worden fans.  The market had yet another solid week with the SPY closing at another 52-week high on a closing basis.

Friday's unemployment report came in loosing just 11,000 jobs far better than the forcast loss of 125,000 jobs.  Temporary jobs actually increased for the 4th straight month adding 52,400 jobs, the highest in 4 years.  That suggests that firms are starting to hire again and gave some additional evidence that this recovery is for real.

Gold fell of its high perch, gapping down on Friday and erasing its gains for the week.  The volume on GLD was huge - the highest I could find on record.  But from a trend-following perspective, GLD simply made it back to the top of the upper range band, so we have a lot of sideways to down action required before GLD is in a legitimate downtrend.

In terms of the big picture, IBD indicates "Uptrend Under Pressure" although things still look pretty positive from where I sit.

My only trade on the week was adding 100 shares of Compellent Technologies (CML) in each account.  I found this data storage company on the "Stocks in the News" column in last week's Investors Business Daily.  The stock has a composite rating of 98 and is just becoming profitable on a bottom-line basis, but sales are growing in the 20-40% range

On the technical side, the stock is looking strong and at a 52-week high.  Its still making its way back to the price level of its late 2007 IPO of $24.  The chart is clearly showing accumlation after record earnings were announced back on October 28th.   There was some type of IPO announced recently, but it appears to be well received since it didn't hurt the stock.

See you on the positions update.

AAPL - I closed out of my AAPL Jan 150 call at a small loss this past week.  I'm still long 50-shares of AAPL and looking for a pullback to the 190 area to reload, if we get it.

AUY - Following the chart of GLD - big gap down from the top but still in a screaming uptrend.  Too late for long side entry here.

C - Most of the financials are now below the daily range bands, but still well above the weeklies.  GS, JPM, BAC and the rest are all now below the daily range bands.

DIA - is starting to show some signs of distribution, but still holding up relatively well versus its peers.

EEM - Clearly showing some signs of distribution where the red bars are bigger than than the green bars recently.

HMSY - There was a good article on this company in the "Under the Radar" column on http://www.thestreet.com back on 11/11/2009.   Granted, i'm 3 weeks late in reading this article, but the chart is still looking good.

KO - Stocked gapped down on Friday with the Dubai news, but still just coming back to the upper edge of the upper-range band.

MYRX - Stocks is now in full-fledged downtrend on the daily.

NEOG - Stock is cooling off with the rest of the market.

SPY - Also gapped down on the Dubai news. 

USO - Went negative on the daily range bands, now for the 3rd time since June, all of which were bad signals, the weekly is still up and doesn't go negative until USO crosses 32.07 on a closing basis.

XLB - Chart is looking very much like SPY and DIA.

YUM - Nothing much going on this week.

CD Review

Taxable

LEHMAN BROS FSB WILMINGTON DEL C/D FDIC INS TO LIMITS 5.30% 05/17/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40%  06/21/2010

FARMERS & MERCHANTS BK TOMAH WIS C/D FDIC INS TO LIMITS 5.25% 07/12/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

Retirement

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40% 06/21/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

RG PREMIER BK HATO REY C/D FDIC INS TO LIMITS 5.45% 07/30/2010

That's it, have a great week and keep your power dry.

Welcome back Worden fans and market watchers.

The market pulled back Thursday and Friday after making a marginal new high on "Mutual Fund Monday."  This is when all the mutual fund cash entered over the past week has to get put to work in the market.

The bottom line on the chart on the left shows "custom index" counting the number of stocks making new 52-week highs.  Note how the number of new highs has diverged (make a lower high) while SPY has made a higher high. 

 As I mentioned to Dr Cthruu on his post at http://cthruu.blocks.com, I think there are too many underperforming money managers out there looking to buy on a pullback for this market to fall through the floor.  Also, we have some very strong seasonal upside bias between now and the end of January. So i'm not looking exit my longs at this point, but i'm not looking to add any new longs either.

IBD has switched its Big Picture to "Market Uptrend Under Pressure".

CERN was my only trade of the week where I bailed out of my recent new long with a loss of $1.07 per share.  This was a bit of a bummer because I was up about $2 for a short time on this position.  But the exit was good because I would have given back another $1.50 had I stuck with it.  Note how the range bands have gone negative and short is now the place to be.  Granted, the last 2 short signals in this stock have not been good ones. 

Generally, I would not consider shorting a stocks with such good fundamentals and would rather look for sellers in weaker stocks.

Overall, i've been focusing alot more on the Forex market lately.  I'm a bit sick of stocks, just because i've so badly underperformed the indexes this year.  It hasn't been a disaster, down about 5% in my Taxable account and about 2% in my 401K rollover account.  Meanwhile, my passively managed 401K at my employer has been following the market up and down and is well up for the year.

You can follow my adventures with Zulutrade and the Forex market over at http://zulumon.blogspot.com.

See you tomorrow on the positions update.

KO is the chart of the week.  CNBC ran a special on Coke this past week and it showcased the fact that this global powerhouse is as much about marketing as about the underlying product.  Coke is the most recognized brand on the planet.

On the technical side, Coke broke out to a new 52-week high on Friday.  Volume has been holding up well and i'm up about 8% since my entry just above 52 back on 9/14.

Also, insider Kent Muhtar purchased a total of 2,800 shares on November 6, 2009.  Over the last 5 years insiders have on average purchased 148,259 shares each year.  Presumably, insiders expect the stock price increase to continue.

Back to alphabetical positions review.

AAPL/APVAJ - Apple computer is back from the recent sell-off and has settled just south of the recent closing high at 205.20.  The company announced on Thursday its going to open 40-50 stores in 2010,  with half of them outside the US.   Adding outlets in London, Paris and Shanghai, they are looking to expand the brand globally which is very smart and will benefit from a weakening dollar.

Apple has a lot of competition between RIMM, Palm, Motorola and now Google but still are the kings of cool leading the way in Cramer's Mobile Internet Tsunami.

AUY - Gold continued to a new high this week and Yamana participated. UBS raised their target on Yamana to $15.

C - Citi and the other financials are looking pretty sick.  C and BAC are now below the daily range bands but still above the weekly range bands.   Sector leaders JPM and GS are also below their daily range bands, but holding well above their weekly bands.

Paulson & Co., one of the world's largest hedge fund firms, held 300 million shares of Citigroup (C) at the end of September, according to a regulatory filing late Friday.  This position was added in the past 3 months and was worth 1.45 billion on Sept 30th.

CERN - Cerner is a new position as of last Monday.   I'm going to have to watch this one closely as the chart is showing some signs of distribtion.

DIA - The Dow-30 ETF is looking good.  Components KO, MCD, DIS, HPQ, MSFT, UTX. WMT, and AXP are all looking really good.

EEM - Emerging Markets ETF is looking sharp and ready to breakout above the recent high at 41.50.

HMSY - This chart is a thing of beauty and I only wish I held more.  No news to report this past week.

MYRX - Earnings came out Friday and the company reported its first quarter as an independent company since its spin-off from Myriad Genetics earlier this year.  Since the company has no history as a stand-alone, its hard to get a handle on what the results mean.  But the market liked it and the stock popped on the best volume in about a month.

NEOG - James Herbert, Chief Executive Officer of Neogen Corporation (NEOG) rung the closing bell at the NASDAQ on Friday 11/13/2009.  This stock cap has a small-town time feel.

SPY - Stock looks ready to pop out to a new high for the year on Monday's mutual fund buying.

USO - Stock dropped below the upper range band on Friday, but i'm sticking with it.

XLB - Select Sector Materials, stock has a big distribution day on Thursday, but i'm sticking with it.

YUM - No news this past week, but I found an article from October 30th that the company opened its 13,000th restaurant outside China and the US by YRI - Yum Restaurants.

CD Review

Taxable

LEHMAN BROS FSB WILMINGTON DEL C/D FDIC INS TO LIMITS 5.30% 05/17/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40%  06/21/2010

FARMERS & MERCHANTS BK TOMAH WIS C/D FDIC INS TO LIMITS 5.25% 07/12/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

Retirement

AMCORE BK N A ROCKFORK ILL  5.0% 11/16/2009

DISCOVER BK GREENWOOD DEL C/D FDIC INS TO LIMITS 5.05% 11/16/2009

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40% 06/21/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

RG PREMIER BK HATO REY C/D FDIC INS TO LIMITS 5.45% 07/30/2010

It was another solid week for the bulls, but volume was one again lower. 

After the nasty end-of-October sell off, most stocks have recovered their losses and moved back to just under their recent highs.  SPY and APPL are 2 good examples.  The Dow Utilities, Dow Transports, SP-500 and all 3 Russell Indices show similar patterns.  

The only standout among the indices is the Dow Industrials which moved out to a new high for the year on Thursday.

In terms of the big picture, Investors Business Daily moved back to "Market in Confirmed Uptrend."

The market is showing a distinct ability to move higher in the face of bad news.  Last Friday's unemployment report was awful, and this Friday's consumer confidence hit a 3 month low.  But stocks rose anyway and are now up 9 of the last 10 days, but on lower volume.

In term of trading, I picked up 100 shares of Cerner (CERN) in each account on Monday.  I've been watching this stock make new highs for much of the year and got shaken out earlier this year on both a stock and option trade.  After making a new high at about $85, we got a nice orderly pullback to the $76 area.  I got in at about $78.50 and it moved higher from there, closing the week at $80.14.

From the weekend perspective, I have to watch this one carefully.  IBD indicates "Medical IT forms's sales fell for the first time in many quarters."  The chart shows distribution (selling on higher volume) on Tuesday and Thursday of this past week after a strong Monday.  The weekly chart shows distribution as well. 

My other stock trade this week was taking profits in ABVT.  After entering this position at $58 even back on 9/23/2009, I was able to take a $550 profit in each account which was just too good to pass up.   Of course, the stock meandered around and closed higher for the week and closed at $54.21.   I'm trying not to chase this stock and waiting for a pull back before re-entering.  On the technical side, IBD indicates "Just above 63.64 buy point after rebound from 10-wk line."  That's clearly a typo and they meant 53.64.  Either way, i'm now on the wrong side of this trade and will be waiting for a pullback to re-enter.

In terms of stocks with squares around them (in good technical and fundamenal buying positions) they are AAPL and HMIN.    I'm already long on AAPL and reluctant to buy Chinese stocks.

The only other portfolio action this past week was purchase of LEHMAN BROS FSB WILMINGTON DEL C/D FDIC INS TO LIMITS 5.30% 05/17/2010 in my taxable account.

See you on the positions update.

ABVT  (Abovenet) is once again the chart of the week.   Earnings came out on Friday and beat expectations with actual earnings of $0.96---22 cents above the consensus estimate. ABVT also issued earnings guidance for next quarter that is above current analyst expectations.

On the technical side, ABVT broke out to a new all-time closing high of 53.71 on good, but not record volume.  

ABVT is #23 on the IBD 100.  IBD's technical blurb indicates “Just above 53.54 buy point after bounce off 10-week average”.

Back to alphabetical positions review. 

AAPL / APVAJ had quite a comeback last week.  After taking about 8 points profit on my first 100 shares, I bought 50-shares last week just under 190 a share.  The stock is rallying back on declining volume, and is presumably going to challenge the upper range band this coming week.    It remains to been seen whether it will break above the upper band at 199.50.

I’m also long the Apple January 150 call, and now I’m in the hole about 10 points.  Looking for a big rebound back to a new all time high by 3^rd week of January.

AUY is once again on the move.  Gold moved out to a new record high this past week.  Several analysts raised targets to 14.75 to 15 about 17% above where it is now.

In his blog post on 10/10 Dr Cthru (http://cthruu.blocks.com) indicates he long a “boatload” of XLG.  Look for higher prices ahead.  IAMGold (IAG) is now #11 in the IBD 100. 

C – Citi hasn’t been able to get out of its own way lately and is below the daily, but above the weekly range bands.   It’s going to be along slog.

DIA is looking sharp and now above both the daily and weekly range bands.  Note how DIA held above the daily range band on this recent sell-off while most major indexes broke down.

EEM – Recently went negative on the daily range bands, but has bounced nicely off the weekly range band on the weekly chart.

HMSY – This chart is a thing of beauty and this position is a screaming add-to.  Fundamentals are smoking also.

KO – This stock had a nice rebound this past week and never went negative on the daily or weekly range bands.  Their bottling division (CCH) had good earnings this past week.  The chart is a thing of beauty, but volume has been tepid in the past week.

MYRX – Myraid Pharma has cooled off since the big news back in October about its oral anti-AIDS formulation. 

NEOG has gone negative on the daily range bands, but seems to have found support at $30.  Sticking it it long-term.

SPY – Up nicely on this position and I’m sticking with it.

USO – gapped down this past week, but seems to have found support on the top of the daily range bands.  Staying positive for now.

XLB – Select Sector Materials ETF has been a rocky ride lately, triggering a series of buys and sells on the daily range bands lately.  I’m sticking with it as an inflation play.

YUM – Is looking really good and was started as a buy this past week by Janney Capital Markets.  Chart is moving sideways, but has come back recently on good volume after this recent sell-off.

CD Review

Taxable

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40%  06/21/2010

FARMERS & MERCHANTS BK TOMAH WIS C/D FDIC INS TO LIMITS 5.25% 07/12/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

Retirement

AMCORE BK N A ROCKFORK ILL  5.0% 11/16/2009

DISCOVER BK GREENWOOD DEL C/D FDIC INS TO LIMITS 5.05% 11/16/2009

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40% 06/21/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

RG PREMIER BK HATO REY C/D FDIC INS TO LIMITS 5.45% 07/30/2010

Need to buy some CD’s in my Taxable account this week.

What a difference a week makes.  Last week at this time, I was depressed and dejected that I had given back all of my recent unrealized gains.   But this week many of my positions came back to profitability – much more than I could have expected last week at this time.

But before we get too excited, keep in mind that after downside breakdowns, we often get a weak-rally attempt back up to challenge the old high which fails and things turn back down again. 

SPY could be doing that right now, and if we get a close above 107.95, we will once again be above the upper range-band and back into long mode.  But it could also serve as resistance and we could head back down after challenging the upper range band.

By the way, the 2 lines below the chart show performance of the range-bands crossover trading system since SPY started trading back in 2003.  This system was performing more or less equivalent with buy-and-hold until the big sell-off back in 2008.  As of now, range bands are crushing buy-and-hold for SPY 173 to 94 on a 100-dollar starting basis back in 2003.  Bear in mind that these results do not include commissions and dividends which would overstate performance of the range-bands system and understate performance of buy-and-hold.

Investor’s Business Daily’s Big Picture perspective remains in Market in Correction.  This means don’t take any new positions.  So I followed this advice and didn’t take any new positions this past week.   

So for now, I’m keeping my powder dry.

That’s all for now, see you on the Positions update.

How quickly things change from one week to the next.  Last week, I was feeling good, and making back some of my losses. One week later, bang! Its all gone and i'm back in the hole again.  Oh the pain.....

AAPL was the heart-breaker of the week.  After a spectacular leap up above $200 on earnings it got crushed and ended the week at 188.50.  I sold my long stock at 194.46 on Wednesday.  But I rode the Jan 150 calls all the way down and i'm looking at a whopping $1500 loss each contact on that position.

Looking at the daily chart, AAPL has actually closed below the lower 28-bar range bands.  That's a major sell signal and a bit shocking since I picked up 50 shares in each account on Friday just under 190. Look out below.

On the bright side, I bailed out of SXCI and took a decent profit after having been up much more.  ABVT was another heart-breaker.  With a high of $53 mid-week, it gave it all back and close the week at $48.40, just above my entry at $48. 

In this market, you have to sell the stock when everything looks amazing on the chart.  Its the exact opposite of what i'm conditioned to do, which is hang on for the big winner. Oh the pain.....

Our buddies over at IBD have switched to 'Market in Correction."  Its like after all that ridiculous enthusiasm about this economy, we are finally getting our long over due fall sell-off.

At this point, all I can do is find the sunshine inside and live to trade another day. See you on the positions update.

Abovenet (ABVT) is the chart of the week. 

We had a convincing breakout of the 28-bar range-bands back on 9/23/2009 and again on Friday 10/23/2009.  IBD says "Keeps weekly closes above 10-week line since July, thin stock."  IBD has a composite rating of 98 and gives it A- on Acumulation/Distribution

No earnings on the horizon and news is quiet

Now back to alphabetical positions review.

AAPL - Long Apple stock and well in the money.  Cramer loves this stock and calls the greatest growth story in the market now.  His price target of $300 comes from estimates for next year of making $13 a share.  Based on their growth rate of 30%, he says growth managers will pay 30-times the $13 a share earnings or $390 a share.  He dropped the extra $90 just because he didn't think people would believe him.

Seasonally, we have the wind at our back since the 4th quarter calendar year is typically the strongest for Apple stock with a seasonal peak just before MacWorld in the 3rd week of January.

APVAJ- Apple Jan 150 call. The stocks seems to have run out of buyers at this level and needs to consolidate the recent gains before going higher.  $200 is psychological support for now.

AUY - Yamana Gold has been marking time after a recent breakout.  Earning due November 3rd.

C - The 25-top paid executives at Citi are going to have their pay cut by as much as 50% according to the government pay czar.  This is yet another blow to free market-capitalism, but with the political climate being what it is, nobody feels too sorry for these highly-paid bank execs.   On the technical side, the stock is above the weekly range bands, and still hanging above the lower range band on the daily range bands.

DIA - Down about a buck on this position, but sticking with it for general market exposure.

EEM - Emerging Markets ETF.  Daily and weekly range bands pointing upward, sticking with it for now.

HMSY - Earnings due this Friday October 30th, so we have to watch this one carefully.  Could be an opportunity to double-down on a sell-off.

KO - Stock is coming down against the lower range band.  Red bars greater than green bars this past week.

MYRX - Myraid Pharmaceuticals.  Some news came out last Friday: "Myriad Pharma's Azixa is efficacious in a model of human brain cancer and its activity is additive with Avastin."  Stock is hanging above upper daily upper range band.

NEOG - Stock is moving up quietly and is about to break above the upper range band once again.  Probably a good add-to at this point

SPY - Well in the money on this one for now and sticking with it.  As I said in my weekly update, I think its a forgone conclusion stocks will be higher at the end of the year.

SXCI - Stock is now #3 on the IBD-100 and has been on the IBD 100 since January 0f 2009.  Stock gave me a bit of a scare this week and pulled back to the breakout point at 47.50.  Red bars bigger than green bars this past week.   Earnings due out before the market open on November 5th.  No news this past week.

USO - Oil cooled off a big this week, but still above both the upper and lower range bands.

XLB - Select Materials ETF.  Red bars bigger than green bars this past week.

YUM - Cramer complained about YUM's earnings.  Sure same-store sales are flat in the US, but the company is firing on all cylinders in China

CD Listing

Taxable

WASHINGTON MUT BK FA STOCKTON CA CD FDIC INSURED TO LIMITS 5.05% 11/02/2009

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40%  06/21/2010

FARMERS & MERCHANTS BK TOMAH WIS C/D FDIC INS TO LIMITS 5.25% 07/12/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

Retirement

AMCORE BK N A ROCKFORK ILL  5.0% 11/16/2009

DISCOVER BK GREENWOOD DEL C/D FDIC INS TO LIMITS 5.05% 11/16/2009

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40% 06/21/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

RG PREMIER BK HATO REY C/D FDIC INS TO LIMITS 5.45% 07/30/2010

Have a great week!

The market put in another solid week with the Dow-30 finally breaking the 10,000 on Thursday before closing a hair below the 10K mark on Friday.

Earnings were a mixed-bag in what seemed like a winner-take all situation.  Winners were JP Morgan Chase and Goldman Sachs.  Loosers with Citi and Bank of America.  It seems like an increasingly polarized world with an ever widenening gap between the haves and have-nots.

On the technology side, Intel and Google had strong earnings and its great to see   companies in technology space awash in cash innovating for a better future.  When you think about it, technology and innovation is what the US has going for it.  Its certainly not low operating costs or fiscal responsibility!

Anyway, the general market has been so good lately, that its making less sense to bet on individual stocks and just buy the index.  Easy buys in this environment are SPY, DIA.  Don't over think it, just buy the index.

In terms of my week's trading,  PWRD was a heart-breaker.  After a great run-up to 50 a few weeks back, it pulled back to the 45 area in what would be considered an average or expected pullback.  But it kept going south and I had to bail out of my position at about 41.25 in one account and just under 40 in another account.

This was a particularly painful loss since i've been avoiding nasty losses for the most part lately.  Everything else is going well and I will cover this in my positions update.

Finally, I closed out the SPY 107 short call on Thursday for a loss of about $100 per account.  I was well in the money on this position (in addition to the 105 put) about 2 weeks ago.  Instead I just held on and let both legs go to a loss.  On the bright side, I held onto my SPY which is now well in the money.

This brings up a good point with option trades that you can't just let them ride.  You must have an exit plan and execute accordingly.

Overall i'm finally making back some of my losses for the year.  See you in the positions update.

SXCI was the chart of the week. 

I picked up some on the breakout at $45 back on 9/18.  After an orderly pullback to the breakout point, the stock slowly worked its way higher.  On Thursday it closed quietly at a new all-time high of $49.21.  On Friday it broke decisively higher and took out the resistance at $50.  No earnings due until 11/6.  This stock could be at $60 by then.

YUM came out with earnings on Wednesday Oct 7th.   David C. Novak, Chairman and CEO, said, “I’m pleased to report we are raising our full year 2009 EPS growth forecast to 12% based on our strong year-to-date profit performance. Our global portfolio delivered an impressive 15% operating profit growth this quarter, driven by 32% growth in China and 18% growth in our U.S. business.  

Translation - the company is kicking butt in China and emerging markets to make up for a mature and slowing market in the US.  I like and i'm sticking with it on the long side.

Now back to the alphabetical positions review....

AAPL - This chart is a thing of beauty and is coming up against resistance at $190 and the all time high at about $200.   I suspect the stock will be above $200 by the time earnings are due on 10/21.  Its going to be quite a ride in the next 2 weeks so strap on your seatbelt.

ABVT - Stock is holding above my recent entry at $48. No recent news or earnings on the horizon. 

AUY - Already covered in my Weekly Update, will add AUY or GLD on a pullback to support.

C - Earnings due this coming Thursday.  Loan loss reserves are going to be the story.  We are looking for underlying revenue growth to get C out of the morass.

On the negative side, Citi announced its going to sell its Phibro commodities trading unit.  This business made over $300 million for Citi last year, but they are being forced to sell it based on the political pressure of have to pay their stop trader $100 million a year.  This is clearly the negative of 30% government ownership.

EEM - Emerging Markets ETF is up 1.7% since my recent entry. Weakening dollar helps.

KO - Coke peaked for the week on Wednesday just above $55.  Earnings are due next Tuesday Oct 20th.  Company has good emerging markets exposure and something like 70% of revenues come from non US sources.  So the company will benefit from a weakening USD.

MYRX - Stock continues to cool off after recent excitement regarding is oral Aids formulation.

NEOG - Stock is pulling back after some recent good earnings and a contract with the Chinese government.  Looking to add-to in the 27.50 range.

PWRD - Price action has been disappointing recently.  I entered this position about the same time as SXCI, both on a double-down after good price action.  Still holding above the lower range band, so i'm sticking with it.

SPY - Looks like i'm going to get called away since I sold the 107 call for even in exchange for the 105 put. 

SXCI - Already covered above.

USO - Daily range bands moved to the upside this Friday at 37.11.

XLB - Up slightly on this position and should probably bail out.

YUM - Already covered above.

CD Listing

Taxable

WASHINGTON MUT BK FA STOCKTON CA CD FDIC INSURED TO LIMITS 5.05% 11/02/2009

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40%  06/21/2010

FARMERS & MERCHANTS BK TOMAH WIS C/D FDIC INS TO LIMITS 5.25% 07/12/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

Retirement

AMCORE BK N A ROCKFORK ILL  5.0% 11/16/2009

DISCOVER BK GREENWOOD DEL C/D FDIC INS TO LIMITS 5.05% 11/16/2009

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40% 06/21/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

RG PREMIER BK HATO REY C/D FDIC INS TO LIMITS 5.45% 07/30/2010

Have a great week!

Coca Cola (KO) is the chart of he week and seems to be bucking the recent market trend.  Its now a mere .30 from its recent high at 54.14 and up 4 out of 5 days this past week. 

Citi started Coke with an Outperform rating on Tuesday with a $61 price target.  With 75% of its earnings coming from overseas, KO stands to profit from a weakening dollar.

Now back to the regular alphabtical positions coverage.

AAPL - Earnings are due 10/21. The stock made a nice counter-trend move non Friday bouncing right off the top of the upper range band.  Stock got an upgrade from UBS on Friday.  Price action is still positive but is facing an unhill battle with the overall market for tech stocks softening.  I'm expecting one day soon we are going to wake up and AAPL will gap up to $220 in a single tick.   Then I will wake up - ba ha ha.

ABVT - Stock slipped below by entry point at $48, but remains above the lower range band.  IBD indicates "Finding support above the 10-week line following pullback.  Volume has been pretty low this past week but i'm sticking with it.  No options available for this stock.

C - Stock has been hugging the lower range band, but holding up fairly well.  Earning due out next Thursday October 15th.  Most news this week ordinary capital markets news except on Tuesday Citi annonced it would sell its credit card business in Portugal to Barclays.

EEM - Had a nice high-volume day on Wednesday due to some end-of-quarter buying.  I'm down about 1.30 on this with so may consider some type of option-based hedge.

KO - Already covered above.

MYRX - Cooling off again after recent excitement regarding positive findings on their oral anti-AIDS formulation.

NEOG - Stock is cooling off after a recent earnings-related run.  Looking to double-down somewhere south of $30.

PWRD - Perfect World is hanging in there and showing some signs of distribution.  IBD indicates "Analysts see Chinese Gamers earnings jumping 55% this year.  With my cost at $46 i'm trying to hang in there and stick with it.   I may sell a 45 call for 2.20 against half of my position this coming week with the expectation of some sideways action since earnings are not out until 11/10.

SPY - I'm now underwater about 2.30 on this position, but offset by my 107 - 105 collar I entered last week for even.

SXCI - Stock got a few upgrades this past week with targets now moved to $49 and $51.  This stock is #3 on the IBD 100 with a composite rating of 99.  IBD indicates "pauses, dips in lower volume after solid advance.  Fundamental summary indicates "Drug benefits manager's EPS estimated to rise 60% this year, 25% in 2010.

USO - Went negative on the daily range bands with past week.  This is my long-term play on inflation and energy prices.   My cost at 36.50 so i'm currently in the hole about 0.75.    I might consider selling the October 37 call at 65 cents, but the comission will cost me $10.  If I had Interactive brokers, I would consider doing it because the comission would cost me $1!

XLB - With cost at 31.15 i'm currently in the hole about a 1.50 on this position, but trying to stick with it.

YUM - The restaurat group took a hit this week with a sell-off in Darden restaurants (DRI).  But as I type this i'm about to run off to

SWGJG/SWGVA - This this SPY Oct 107 short call, Oct 105 long put entered last week for even.  I'm up about 2.80 on this position which is offset by my 2.40 open loss on my SPY long position.  Sticking with it for now and will likely ride this one until just before expiration.

CD Listing - Sorted by expiration

Taxable

WASHINGTON MUT BK FA STOCKTON CA CD FDIC INSURED TO LIMITS 5.05% 11/02/2009

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40%  06/21/2010

FARMERS & MERCHANTS BK TOMAH WIS C/D FDIC INS TO LIMITS 5.25% 07/12/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

Retirement

AMCORE BK N A ROCKFORK ILL  5.0% 11/16/2009

DISCOVER BK GREENWOOD DEL C/D FDIC INS TO LIMITS 5.05% 11/16/2009

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40% 06/21/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

RG PREMIER BK HATO REY C/D FDIC INS TO LIMITS 5.45% 07/30/2010

That's all for now, have a great week!

Mr Market took a few twists and turns this week but in the end made an important price rollover to the downside.

Monday's Yom Kippur holiday was most positive day of the week with SPY bouncing off the top of the upper range band (light blue bar).  Tuesday made a marginal higher high but closed lower.  Wednesday, Thursday and Friday all closed lower.  Friday's close is perched precariously right on the lower range band.  The IBD Monday edition indicates "Market Uptrend Under Pressure."

My best trade of the week was against the long position in SPY I picked up back on 9/10 at around 104.70.  On Monday's rally, I sold the October 107 call and bought the October 105 put in each account for even money (executed at 1.68 per side).  By the end of the week, I was up at 2.80 on this trade offsetting the 2.30 open loss i'm showing on the original SPY trade.  I have 2 full weeks to go on this trade, and I have a number of ways to close this trade at a profit and still hold onto my SPY.

Next up was a long position in RIMM I entered on Wednesday 9/30 at 68.44.   My thinking was that the sellers were tired and my stop on this trade was below the recent low at 66.40 for about a 2-point risk.  I closed this trade Friday just above 66 and took about a 2.30 loss.  The stock closed the week at $65.40.  This trade was based more on hope than on any price action these types of trades must be eliminated to ensure my long-term success.

The last trade of the week was closing a position i've held in QCOM.  If you've been following my positions update you will recall that QCOM has been showing serious signs of distribution for the past few weeks.  This week's price action sealed the verdict when QCOM broken support at 45 and quickly worked down to 42.  I sold my shares at about $41.95 and took about a 4.0 profit against my entry at 39.70 entered back on 4/1/2009.

Check out the way the lower range band crossover back on 45.02 pre-saged the coming sell-off.

As for ths coming week, some of my remaining longs are looking a bit stretched and I may get shaken out of them going forward.  More tomorrow in the positions update.

On the development front, i'm moving toward migrating my E*Trade accounts over to Interactive Brokers where I can trade for $1 instead of the $10 i'm paying now.  More to come on that front.

Enjoy your weekend and sleep tight.

Neogen (NEOG) was my run-away winner on the week moving out to a new all-time high on good volume.  Earnings came out and were up 18% and revenues were up 12% from the same period last year. 

This stocks is pretty thinly traded and often gives opportunites to add-to on a pullback which I may do on a pullback below $30.

Now back to regular alphabetical positions review....

AAPL - Long 1 lot in each account with average cost of 186.30.  Looking to slip out of this position at a small profit as I expect this to pull back and give us a lower entry later.  Earnings due 10/21 and may be buoyed by the proposed FASB rule change regarding accounding rule change.  Stock is a member of the IBD 100 with a Composite Rating of 98.

ABVT - New entry from last week, stock still in IBD 100.  IBD indicates stock has had 5 straight quarters of triple-digit EPS growth.  Volume Bars show accumulation on this past week's action.

C - Stock has been hugging the lower range-band lately. Sticking with it for the longer term.  Cost is at $3.82 so i'm currently in the money.

EEM - Stock is resting on the top of the upper range-band.  Down about a point on this position.  Getting nervous if on this position as it is vulnerability of the general market takes a dive.

KO - Coke had a nice orderly 5-day pullback on low volume, then found support at 52.25.  Costs is at 52 so i'm up about a buck.  Sticking with it.

MYRX - Action has cooled a bit this past week since postive Phase 2 results of its Beviramat experimenal HIV drug.  Zero cost from MYGN spinoff.

NEOG - Already covered above.

PWRD - Stock sold off hard after making a new all-time high just over $50.  Stock ended at $44 and i'm now down $3 on the 2nd half of the position and down slightly on the first half.  Trying to hang in there this coming week and hopefully some postive upside momentum can resume.

QCOM - Stock is now negative on the daily range bands. An article on 24/7 Wall Street indicates the company has 15 billion in cash and securities on the books.  Up nicely on this position with cost at about 39.60.

SPY - Index is showing some signs of distribution.  With my cost at 104.72, i'm down slightly.  If this position slips about 105, i'm going to sneak out at a small profit.

USO - Getting pelted on this position. I'm starting to think that energy companies might be a better way to play energy than USO.  This is because energy companies pay dividends and USO has additional overhead to to rollover costs in the futures.

XLB - Select Sector Materials ETF.  With cost at $31.50,  i'm down slightly on the position

YUM - Stock broke recent support and is now on the way down. 

CD Listing - Now sorted by expiration

Taxable

WASHINGTON MUT BK FA STOCKTON CA CD FDIC INSURED TO LIMITS 5.05% 11/02/2009

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40%  06/21/2010

FARMERS & MERCHANTS BK TOMAH WIS C/D FDIC INS TO LIMITS 5.25% 07/12/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

Retirement

AMCORE BK N A ROCKFORK ILL  5.0% 11/16/2009

DISCOVER BK GREENWOOD DEL C/D FDIC INS TO LIMITS 5.05% 11/16/2009

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40% 06/21/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

RG PREMIER BK HATO REY C/D FDIC INS TO LIMITS 5.45% 07/30/2010

AAPL as well as the entire market looks pretty extended here. I'm going to try and stick with it on the long side.

C - Stock has stopped resting on the upper daily range band and is now perched on the lower range band ready to break through it to the downside.  4.26 is the lower range band but i'm in this one for the long term.

EEM - Stock is right below where I bought it and looks like I top-ticked this one and I'm going into the red. 

KO - Has been a real winner since entry early last week.  I'm going to try and stick with it.

MYRX - Has been rocking lately and is now a breakout buy crossing the old high of 7.5.  They had some positive pre-clinical data on their HIV drug.

NEOG - As expected stock dropped back below 30 giving us an opportunity for re-entry.

PWRD - New entry from last week at 30.  Stock goes to sleep for days at a time then wakes up to become a winner again.  Just need to stick with it through the sleep period and not get shaken out like I did last time.

QCOM - Went negative on the daily range bands for the first time since last December! Also, red bars have been swamping green bars on both the daily and weekly charts.   I love this company long term and may either buy puts or sell a call.

RIMM - Is also looking pretty toppy here and its utterly failed to get over resistance at $85.  Earnings due out this Thursday though.  IBD reminds us that RIMM is expected to report the 6th quarter of slowing EPS growth.  I'm going to try and slip out of this with a small profit. 

SPY - The market is well extended to the upside, which begs the question - what's the proper stop loss on this position?  How about 105.10 so I can get out at scratch plus commissions?

SXCI - Rocking to the upside, close below the low of the entry bar at 43.70. 

USO - Forming a wedge pattern and it moves sideways.  Not expecting anything sudden here, could be a good opportunity to sell calls at 38, cost at 36.50.

XLB - Commodities play, don't panic out, it a long term hold.  How about sell call on half and buy protective put?

YUM - Weekly still pointing up, daily ralling back.  No signficant news this past week.

CD Listing - Now sorted by expiration

Taxable

WASHINGTON MUT BK FA STOCKTON CA CD FDIC INSURED TO LIMITS 5.05% 11/02/2009

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40%  06/21/2010

FARMERS & MERCHANTS BK TOMAH WIS C/D FDIC INS TO LIMITS 5.25% 07/12/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

Retirement

AMCORE BK N A ROCKFORK ILL  5.0% 11/16/2009

DISCOVER BK GREENWOOD DEL C/D FDIC INS TO LIMITS 5.05% 11/16/2009

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40% 06/21/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

RG PREMIER BK HATO REY C/D FDIC INS TO LIMITS 5.45% 07/30/2010

Going to start looking at Interative Brokers.  I thought I read that you get stock trades for $1 and if you don't make $10 in trades a month, they charge you $10.  That 90% less than i'm paying now!

It was a rocking week in the stock market.  You know I like to buy breakouts, and it was breakouts galore this week.  I felt like I was finally back in my element after being on the wrong side of the market for most of the year!

First up was KO.  Seeing it clear the recent high at 51, I saw an upside breakout and picked up 1 lot in each account at about 52.  Note how up volume has been swamping down volume in recent days - not even counting Friday's monster volume which was probably options related.

Next up was XLB - Select Materials ETF.  This was an add-to after last weeks entry at 30.80, I added another lot in each account at $31.46.  This is a commodities play and it cooled a bit on Friday.

The runaway winner on the week was AAPL. I picked up 100 shares in each account early Wednesday after Cramer's scoop about the accounting change - and a new target of $244.  I paid just over 179 in each account and picked up almost 6 points in each account since then.

On a related note, I picked up 100 RIMM in each account at about 83.5 on a sympathy trade with AAPL.  RIMM didn't move much from there and is coming up against recent resistance at 85.  Earning are coming up this Thursday, so I have to watch this one carefully.

Next up was EEM - Emerging Markets ETF fund.  This was recommended by Elaine Garzarelli on NBR 2 Friday's ago.  I paid $39.05 for this and its more or less unchanged since then.

Next up was PWRD - Perfect World.  This is a Chinese on-line game maker.  The stock ran up to a minor new high at $45 then pulled back.  I bought 100 shares in each account at about $44.30 and i'm down slightly on this position.  I'm sticking with it because the stock has excellent fundamentals.

Last up with my old friend SXCI.  After taking a healthy profit in the low 40's, the stock worked its way higher and looked like was forming a double top at $44.  In Friday's action the stock blew through the old high at $44 and was trading at about 45.5 by the time I saw it.  So I plunged back in and bought 100 shares in each account at $45.5. After a short pullback, the stock rocketed higher and closed the week at a new all-time high of $47.  Also, volume was a record high of 3.6MM shares showing serious institutional support. 

That's all for now, more in the Positions Update.  Enjoy your Saturday.

C - Citi again seems to have found support right at the upper range band.  Even though we had 3/5 down days this past week, up volume still appears to outpacing down volume based on the daily chart.  Next earnings due out Oct 15th.

CMGIA/CMGIT - This is the CMG_+1.56% Sept 100/105 call spread entered for a debit of 1.5.  This position will likely go out worthless.

MYRX - Is showing some signs of life.  News on Thursday indicated they are going to be presenting their work an oral treatment of human immunodeficiency virus 1 (HIV-1) infection.   They are in the pre-clinical phase here and this company seems to be setup as a research and development shop with the commercialization going on elsewhere.  Stock had a nice pop on Friday on the biggest volume since July.

NEOG - As expected, we got little follow-through from last weeks upside breakout.  Stock is once again under 30 and marking time.  Earnings due next Monday Sept 21 before the open.

QCOM - Stock had 4 straight up-days this past week shaking off recent distribution. I'm sticking with it even though the daily range bands went negative last week.

SPY - Now long one lot in each account from about 104.70.  I entered on a breakout to a new high, and i'm probably going to end up regretting this entry.  But when the shorts repeatedly fail, what's left to do but go long?

XLB - Also long one lot of select SPDR Basic Materials ETF.  Stock recently took out resistance at $30 and looks to be moving higher on the weakening dollar and increasing demand from China.  I saw Elaine Garzarelli on Nightly Business Report last Friday who made this call.

USO - Oil had a wild week, first gapping up to almost $72 on the OPEC meeting, then giving it back on Friday.  Really more of a play on the weakening dollar.

UPS - Long term hold since I worked there back in the late 1980's and early 1990's.

YUM - Posted 3 of 5 loosing days this week on increasing volume.  Definitely some signs of distribution going on but I love the prospects for this casual dining chain.  KFC, Taco Bell, Pizza Hut and Long John Silvers.  Plus, its the fastest growing retail chain on the planet and there's a lot of hungry people in China.

I need to start looking at corporate bonds in addition to just CD's.

CD Listing - Now sorted by expiration

Taxable

WASHINGTON MUT BK FA STOCKTON CA CD FDIC INSURED TO LIMITS 5.05% 11/02/2009

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40%  06/21/2010

FARMERS & MERCHANTS BK TOMAH WIS C/D FDIC INS TO LIMITS 5.25% 07/12/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

Retirement

AMCORE BK N A ROCKFORK ILL  5.0% 11/16/2009

DISCOVER BK GREENWOOD DEL C/D FDIC INS TO LIMITS 5.05% 11/16/2009

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40% 06/21/2010

GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.60% 07/21/2010

RG PREMIER BK HATO REY C/D FDIC INS TO LIMITS 5.45% 07/30/2010

Greetings Worden fans.  It was yet another dissapointing week for the bears with almost 5 straight up-days.  Friday was technically a down day in the SPY but volume was low so it doesn't count as a distribution day.

Underlying Friday's action was a breakaway gap to the upside in the Dow Transportation index.  I've been a long term stock holder of UPS - since I used to work there back in the 80's - so I was happy to see a +2.50 pop to the upside.

The point is that we're not likely to see the market roll over here with such a strong transportation sector.

As I mentioned in last week's blog, After dipping my toe in the short side last week by purchasing SH at 59.62.  After begin briefly in the money, this position moved against me (once again) and I closed it out at 58.00 for a loss of 1.62.  Given another failure on the short side, I decided to dip my toe in on the long side, so I bought 1 lot of SPY and 1 lot of XLB (Basic Materials) in each account on Thursday.

This was my first position in the SPY since I got blown out at the bottom back in March - 1 week from the "generational" low.  Using me as a contrary indicator, its probably time to sell!  But seriously, on Thursday SPY moved out to a new high for the year, so simple trend following indicates a long entry.  Sure, i'm 5 months late to the party, but its a small position and I'll look to offset it with a short call or a long put in the next week.

Anyway, I still have a large cash position and if this turns out to be a peak, I won't be too badly hurt.  If the bulls continue to push this market higher, i'll be on board.

On the taxable side, a CD came due so I went out an bought a replacement CD - DISCOVER BK GREENWOOD DEL C/D FDIC INS TO LIMITS 5.05% 11/16/2009.  For some reason, I bought the replacement in my Retirement account instead of my taxable account.  So I need to make the same purchase in my taxable account this coming week.

One more thing - I started looking into purchase and execution of someone else's automated trading systems at http://preview.collective2.com/.  This is similar to Zulutrade https://www.zulutrade.com - where people you select trade your money for you - except it applies to stocks, futures and options as well.  With almost 9000 systems out there, there has to be some winners in there.  Also, they allow trades to be executed automatically against an Options Express account, so this could get interesting.  More to come on Collective2.

The market put in 3 consecutive down days this week for the first time since the first half of July.  By Wednesday the sell-off petered out and the SPX put in strong day up on Friday.  So the uptrend remains intact unless we get a close below the lower range band at 98.89.

I took the weakness and the seasonal tendency to close out some of my longs and dip my toe in on the short side.

On Monday 8/31, I closed out my position in LFT at 24.07.  Having recently paid 31.60, this was an ugly loss and I missed my planned stop value of 29. by a whopping 5 points.  The stock gapped down through my stop, but I stayed with it and took more pain.

On Monday I also closed out my SXCI in both accounts just over $40.  Having paid 28.20 in both accounts, I took nice gains on this position and SXCI was my single most profitable position for the year. 

On Tuesday 9/1, I closed out my position in ABVT for about 86.65, well below the recent high.  I took 1.30 profit on this position on 50 shares.  A bit of a disappointment since at one point I was up almost 10 points on this position.  As i've found out this year, don't let a small profit run into a loss.  And don't let an upcoming split make you stay in a position too long.

Finally, I dipped my toe in on the short side on Tuesday and bought 200 shares of SH (Inverse SP-500) in my taxable account.  I meant to buy 100 in each account, but instead bought 200 shares in my taxable account.  Its this subtle difference in psychology (where I tend to take more risks in my taxable account) which has resulted in my taxable account being down -6.5% for the year while my retirement account is down -2.63% - while my intention is to make the same trades in each account.  Anyway, the stop loss for this position is below the recent low in SH at 57.60.

Anyway, i'm contining to invest with a depression-era mentality.   At a macro-level, things look terrible with unemployment at a 26-year high.  But non-farm payrolls have been trending up (smaller negative numbers) since January of 2009, so things are looking less bad.   For now, i'm keeping my power dry and my size small.

Greetings Worden fans.

It was a quiet week in the equity and currency markets with most of the senior traders and money managers off to the beach.  For most of us in North America, the kids go back to school next week - so this was summer's last gasp.

Financials continued to be the big winners this past week with AIG up an astounding 52% on the week.  Also, C was up 11.2% and FAS up 3.5%.  At one point, I was long all 3, but I got shaken out of AIG and FAS so C I was only able to participate in Citi.

I've stopped reporting my asset allocations at the top of the blog because i'm clearly a lousy asset-allocator.  I'm currently 55% in CD's, about 25% in cash and 25% in stocks.  My performance is still negative on the year (roughly -2% and -5% respectively in my retirement and taxable accounts.  Meanwhile, my passively- managed 401K account is up 13% on the year!   So i've concluded that active management of my funds is not working well, at least in this environment.  Of course, if the S&P takes another nose dive and gives back its gains, i'll be patting myself on the back - like I was when it was down 24% for the year and I was down only 8%.

Given these results, I don't have much incentive to trade actively.  As a result, I didn't do any trades this week and at this point i'm going to watch and wait for this market to come in.  Also, historically, September and October and lousy times of the year to be in stocks.  So its a good time to keep your powder dry and just observe.  In the words of fellow blogger Dr Cthruu, I'll let the market do the talking.

By way of example, take a look at the chart of MFE.  I bought this stock on the breakout from 40 and paid about $41.95 for it.  Good earnings came out and the stock rallied up to $45 and I was feeling good.  After that it slowly came in and I ended up exiting at about $42.50 with a small profit. Now the stock appears to have rolled over an broken the lower range bands to the downside. 

This is just one of 1000's of stocks and hundreds of patterns.  We have such a great tool in Stockfinder, there's no excuse for not coming up with good trades.  As I say to my kids, if you are feeling depressed, it means your not working hard enough.  So its time to get busy.  See you on the Positions Update probably tomorrow.

Overall 48% high-yield CD's, 27% cash and 20% stocks.  The market continued to defy the skeptics and my high cash position and roared higher by Friday to a 10-month high.

The week started off with a nasty sell-off on Monday causing IBD to change their big-picture to "Market in correction".  But they hedged the call indicating that that things could change back within a few days.  Well we got that rally on Friday and by the end of that day's action, they capitulated and switched back to "Market in confirmed uptrend." 

I took IBD's advice to heart and did not initiate any new positions this past week.  Some of my stocks had good moves however which are worth a quick look.

Citi vaulted ahead 16% this week and up volume has been crushing down volume for several weeks now.  The weekly range bands turned positive on Friday's close.  The last time that happened was back in May of 2007 when the stock was at $55 a share.  Fellow financial AIG had a similar barn-burning performance and it shows the perverse nature of this rally. 

These stocks have have no earnings, huge potential liabilities yet they are the market leaders on higher volume.  What's an IBD follower to make of that?  Well, fundamentals aren't everything and that's why i'm a trend-follower. Looking to add some bullish positions in Citi on any type of weakness.  Selling some cash-secured puts on a pullback to the 3 area might be the way to go here.

The only other development this past week was that my position in CMGIA/CMGIT - Cerner 60-70 call spread went out worthless.  I'm now down about 5% in my Options Express account since I started trading it again and i'm reluctant to loose any more money over there without a lot more homework. 

Checkout my updates on Twitter at http://twitter.com/tcxmon.  Also, checkout my Forex Blog at http://zulumon.blogspot.com.  I had a decent week in Forex and i'm going to write about it probably tomorrow.  Enjoy your weekend.

Overall 81% cash and equivalents and 19% stocks.  It was another punishing week and I continue to underperform the SP-500 despite my high cash position.  I've had my head handed to me again and again on long side and i'm pretty much sick of trying to make money buying stocks.  But before we get to that, let's review the week's trades.

First up I sold half my position in SXCI on Monday at about 24.70.  Having paid 20.50 back in February, this was a 20% profit.   Taking a page from William J O'Neil of IBD, I felt it was time to take some profit to offset some of my recent nasty losses.

Recall from last week's post that I entered a condor position by selling the July APOL 65-60 put spread and the 70-75 call spread for a credit of 3.0.   After the earning's pop on Tuesday, I closed out the short 65-put for a $250 profit.  As the week went on, APOL continued to sell off, and on Tuesday, I closed out the short 70 call for a profit of $170.  That left me long the 60 put and the 75 call for essentially no cost, in fact a $170 profit!  I fully expect the remaining legs to expire worthless, but even so, I like the dynamics of this trade and I expect to do more of these going forward.

Next up on Tuesday was CERN.  Having bought this last week for $62.50, I sold it Tuesday for $57.  This was a nasty $550 loss in each account in less than one week.   This is just the kind of nasty losses that are costing me big. 

While CERN broke out to a new all time high just prior to when I bought it, the volume was lackluster.  Again, taking a page of Mr O'Neil, only buy breakouts when accompanied by at least 2x normal volume.  This breakout was barely 1.2x normal volume.  So i'll take that as (yet another nasty) a lesson learned.

On Wednesday MYRG sold off badly, and I was forced to take yet another loss on my position.  I I originally got into this position at 19.55 and 20 even.  The stock moved up nicely from there.  I added another 200 at 21.05 and sold it off at 21.75 for a quick profit.  On a pullback, I re-loaded that 200 shares at 21 again, looking again for a quick pop  22.  Instead the stock sold off and I was forced to unload the entire 400 shares at 17.75.  That was about a $1000 loss in each account!  Ouch!

Also on Wednesday, I noticed my position in FAS further deteriorated.  Having paid 11.17 for this, I unloaded the 200 shares at 7.05 for about an 800 loss.  This was a $800 loss, fortunately, this one was in my taxable account only.

What gets me is that at one point I was up on each of these positions and all of them ran into nasty losses.  It reminds me what William O'Neil says - there's no such thing as a safe stock!  They are only good when the go up and even the best ones go down.

So you can imagine what this set of losses has done to my investing psyche.  At this point i'm down almost -8% for the year versus -2.5% in the S&P 500.   I was feeling pretty glum on Saturday morning when I logged onto my E-Trade account.  I got a small lift when I see a fat CD that I bought came due and deposited $1600 into my taxable account!

So at this point i'm going into capital conservation mode.  I've been running a scan in the E-Trade account to find CD's expiring between 9/09 and 12/09 yielding between 4% and 6%.  Using this scan I picked up one CD for 20K and another for 15K, both yielding over 5%.  So I have to get busy buying CD's this coming week because i'm now sitting on a pile of cash in both accounts. 

I ran the above scan and found one CD due in late October yielding 5% exactly.  I widened out the expiration date to 12/10 and found a whole bunch of issues yielding over 5%.  The only trades i'm planning to do for the rest of this year are small option trades with small drawdowns and 2 to 1 or better profit to risk ratios.   I'm going to take the remaining cash and sprinkle them through CD's with expiry between now and 15 months from now.

I did some investiation and found that broker Think or Swim has excellent commissions on Options and great tools as well.  I started the process of opening up a Think or Swim account and i'm going to move my cash from Options Xpress over to Think or Swim.

Overall 23% stocks and 77% cash and equivalents.  Stocks position up 4% this week due to new entries in MYGN and TNA.    The market started out strong on Monday and looked like the recent strength would continue.   It kept going until Wednesday then petered out and ended the week right about where it started. 

From the bigger-picture perspective, SPY is below its declining 200 day moving average and above its rising 50 day price moving average.  So the short-term trend remains up, but the longer term trend is clearly down.  Also, Mr Market has a long way to go to get back to its old high at 150 on the SPY.  So I think its a good time to stick with stocks with good fundamentals that can hold up in this nasty economic enviroment.

On that theme, on of my favorites MYGN continued to recover from its recent earnings-related swoon.  Analysts and the Morgan Joseph brokerage started coverage with a buy rating.  The stock rallied and seemed to take out the top of its recent range at 33.90.  So I picked up 200 more shares in each account at 34.5 with the thought to sell some 35 calls against the position.   I did not sell the calls and that turned out to be the high of the week.  I normally don't like to average down, but the fundamentals for this stock look good.  And if you bought every selloff since 2003, you would have been well rewarded, but it takes patience so i'm sticking with it. If it makes its way back up to where I bought it, i'm going to sell those June 35 calls to rake in some premium.

Also, on Wednesday I picked up 100 shares of TNA in each account at about $27.85.  This was also the high of the week and by the end of the week, I was down about 4.5 points on this position.  Its a small position, so i'm sticking with it for now.

Overall 83% cash and equivalents, 17% stocks.  Mr market continued to power higher, mostly without me on board.  This has been a frustrating to those of us who have kept high levels of cash.  I didn't take any new positions this past week mostly due to demands from other areas of my life - okay my regular job.

Weekly range bands have now been positive for SPY for 4 weeks running.  From the moving average perspective, SPY is now above its rising 50-day MA, but still below a falling 200-day MA.  I prefer the range bands over the moving average because the have much less lag. For example, the range bands shown to the left look back only 12-bars.  From a trading perspective, its too late to enter here for the SPY since the lower range band is too far away.

On the breakout watch, RIMM finally broke above resistance at $70.  RIMM is now above both its 50 and 200-day moving average and this week got an analyst upgrade with a price target of $90.  There's no resistance here until the bottom of the gap at $80.  From a trading perspective, the June 70-80 call spread looks good with a cost of $4.35 (max loss) versus a max gain of $5.65.  A lower cost alternative is the May 70-75 call spread with a cost of $2.50 with a max gain of $2.50.

On the performance side, my 2 accounts have now slipped below the S&P for the year as of Friday.  As I mentioned above, keeping my career from blowing up has been taking a front seat to my market activities.

Overall I am 17% stocks and 83% cash and equivalents.   Stocks position down 4% from last week due to long-side liqudations.   Mr Market continued to power ahead despite a gloomy economic environment.  Its a good reminder to listen to what the market is doing rather than resist when it does something other than what you expect.

Monday's brusing action got my out of some of my recent positions.  Citigroup broke the lower range band to the downside on Monday, and I got out just below 3.  Having paid about 2.5, this was a pretty decent profit. 

Similar situation with FAS, I sold my remaining 300 shares in each account at about 7.40 on Monday having paid 5.70, this was a pretty good profit as well.  Finally, I sold my remaining 200 shares of SSO in each account on Monday in the high 21's.  For FAS and SSO, these positions were not yet close to the range bands breadowns, but I sold to collect the profits I had in these positions.   In retrospect, those were the lows for the week and while C was a good sell, I jumped the gun somewhat in FAS and SSO.

For the SPY, the weekly chart went positive (actually last week) which is the first time this happened since April of 2008. In fact, it was almost to the day last year that this happened.  How's that for eerie?  In any case, you can see the market rolled over about 8 weeks later and lent credence to the saying "Sell in May and Go Away".  In any case, the lower range band is too far away for an entry from here.

On the fixed-income side, I noticed by E-Trade Ultimate Savings account yield had dropped to 1.2%.  The yield had been as high as 3.5% late last year.   So I moved the entire amount over the brokerage side and went CD shopping.  I bought 4 different CD issues, all yielding between 5% and 5.5% percent, all coming due between June and September 2009.   I had to pay commissions of about $10 per $10,000, but the extra yield definitely made it worth it.  In this case my small size was an advantage since most of these issues only had between 10K and 25K available at these high rates.

Friday's moves put me behind the SP-500 for the year in my taxable account, but i'm still ahead by about 0.75% on the retirement side. 

Finally, Worden's did a major cleanup of their blog and me and a good number of other posters are now removed from the public view.  So if you like my posts, please add subscribe to my blog and click the "Recommend this" link. Thanks.

I’m doing positions in reverse alphabetical order so I don’t have to lead off with that 3 letter insurance fiasco that begins with A and ends with G.

QAADC – Up nicely on these Apple April 115 calls. No real resistance until we get to the bottom of the gap at 120.

YUM – Long 2 lots on the taxable side and 1 on retirement account picked this up in the mid 28’s so I’m doing okay.

USO – Still looking constructive and I’m staying long

SXCI – Was a big winner this week and finally starting to pay off.

SSO – Already covered from above.  Position exit is problematic of this rally doesn’t hold

QCOM Already covered in weekly update.

NEOG – Chart looking constructive after some recent sloppy action

MYGN – Consolidating its recent gains. Chart starting to look toppy.  Sticking with it for now.

FAS – Had some surprising strength later in the week.  Hears to fine guys and gals over at the FASB for relaxing those accounting rules.  God Bless America.

C – Working its way out of a hole and looking constructive.

AIG – Probably will expire worthless.  Should have bought RIMM instead.

Overall 21% stocks and 79% cash and equivalents. Stocks position up 3% due to some breakout buys. It was a good week with breakouts plentiful. I favor the long side and tend to do better in a risking market which this week certainly was.

After having most of my QCOM get called away at 35, I missed most of the move to 39 On Wednesday late morning, I was impressed the way the stock came up against the top, moved down and very quickly back up both in time and price. So I picked up another 1 lot in the retirement and 2 lots in the taxable account at about 39.60. Stock gapped up and closed the week at 41.25 so that worked out.  This is a great company with solid fundamentals

The market had every reason to sell off after Tuesday's end of quarter window dressing. And sell-off it did, but it didn't last the morning. Instead, we had a decisive change in character and the path of least resistance turned up. I picked up 2 lots of SSO in each account after reading and concurring with Dr Cthuu’s related post.  Got filled on Wednesday at 20.60. That worked out well and SSO gapped up the next day and closed the week at 22.12

On Thursday, I having re-read the good Dr Cthruu’s post on AAPL back on 3/31, I realized we had a bull market in AAPL in the making. I bought 1 AAPL April 115 call in each account and paid about 2.75 in the taxable account and 2.95 in the retirement account.  By week’s end AAPL was up about 4 points and the calls closed the week at 4.30 so that worked out as well. I’m trying hard to resist the urge to take a small profit and let the winners run.

Still down about -3.5% for the year versus -7.5% in the S&P based on Thursday's numbers.

AIG – Still in positive territory on the range bands, but its going to take a lot of time to unravel the mess this company has become.

C – Still in positive territory on this trade, but financials starting to fade.  C was removed from the Global DOW and the regular Dow 30 could be coming soon.

FAS – Still in the money on this position, sticking with it

MYGN – Big winner for the week per my previous post.

NEOG – Rally attempt meeting resistance, I’m a long term holder

QCOM – still holding 1 lot in the retirement account.  After being called at 35, it was painful to see a rally up to 40.  Will look to reload on a pullback below 35

SXCI – No news this past week, sticking with it

USO – Big pullback in Oil on Friday, but rally has been good.  Seasonal trends favor further upside, but it will take some time.

YUM – Range bands went positive this week, looking to add on a pullback

FAS - Have a hefty profit here with cost at 3.20 but capped with the 4.0 call.  Not much to do here but wait for options expriration.  Looking at other plays in FAS because once its gets past 6 we could easily see , $10 next as the next target.

NEOG - Earnings coming up this Thursday.  With stock down 30% off the high, and earnings not really down at all, we are due for a pop.  Animal and food safety is somewhat non-discretionary and earnings should hold up.

QCOM - Nice rally this week however capped by the short 35 calls.  Will likely get called this coming Friday and will look to reload between 34 and 34.5.

SXCI - No news this week and uptrend is intact

USO - May have seen a short-term high here, but sticking with it long term.

YUM - Still with half my position.  YUM launching Taco bell in India - should be interesting.

AAOCG - Short 2 QCOM March 35 calls against entire position, likely be called

FASCG - Short 10 FAS March 4 calls.  Would welcome a pullback to 4 so these can go out worthless, but we're not likely to get it.

Meant to pickup some CD's as per my falling rates post, but lamed out, maybe next time.

Overall 10% stocks, 90% in cash and equivalents.  Stocks position down 14% this week due to further long side liquidation.  It was an absolutely brutal week, and it’s hard to believe the SP-500 is down about -24% for the year already. 

This is wealth-destroying environment and there’s nowhere to hide but cash and CD’s. Take a look at this chart of PTY – Pimco corporate opportunity bond fund.  This is a conservative closed-end fund that at one point was the fixed-income portion of my portfolio.  Paid in the mid- teens for in early 2007 and got blown out last summer at 12.50.  Since then its been cut in half. They later announced they cannot pay their monthly dividend due to an issue with Auction Rate Securities. Not only did the share holders loose half their money- they don’t even get the monthly income which is the major reason they bought it!  So even bold holders are getting crushed in this environment.  So i'm sticking with FDIC insured CD's and bank accounts for fixed income.

I washed out of the second third of my SPY position on Monday at about 70.70.  Also I got stopped out of my position in ETFC at about 0.77 just south of my stop at .80.  Finally, I sold the last third of my SPY position at about 69.80 on Tuesday.  I took nasty losses all 3 of these positions. 

On Wednesday, I saw a range band crossover in the ZSL, and picked up a 100 SZL at 12.90 with a stop at 11.85.  It quickly ran up to 13.45 and reversed.  I got stopped out 2 days later on Thursday at 11.78 for a little over 1 point loss.

Had a pretty good day on Thursday with good pops in both SXCI and QCOM.  For a while, I had some legitimate out performance where my portfolio was going up while the market was going down.  I took advantage of the rally to sell 2 March 35 calls in QCOM at 1.25 each which should bring in 2.50 on March 20.  This was well timed as QCOM dropped hard to 33 on Friday before recovering somewhat. 

Finally, I closed out my GE March 10 puts.  GE made it down to the high 5’s on Wednesday.  By end of week the downside momentum appeared to slow so I sold my contracts for $3.00 even with the stock close to 7.  Having paid $1 back on Feb 19, this was a 300% gain in less than 3 weeks time.  It didn’t nearly make up for my other losses, but a victory nonetheless.

ETFC – Stock came to rest at 0.80, right at my stop level.  Still with it.

NEOG – Chart not looking to healthy, sticking with it for now

QCOM – Got a good rally this week, missed the chance to sell March calls.  Stock price action looks sloppy and we see lower lows ahead.

SPY - Resting right at the November lows. With all the dividend cuts in the pipeline, we expect to see further lows ahead.  

SXCI broke out to a new recent high earlier this week, but gave up gains by weeks end.  Trend still remains up.

Overall 24% stocks and 76% cash and equivalents - stocks position down 4% week due to further long side liquidations.  Not much good news to report and with Feb options expiration behind us, my few longs quickly got into trouble. 

LLL was on the brink of a downside breakout as of last week’s report.  Monday the stock quickly broke down and crossed the lower range band.  This erased a bullish crossover that started back on 12/8/2008.  Sold half my position in each account in the high 73’s.  Later that morning, I sold the other half at 73 in one account and 72.75 in the other.  Having paid 79 and 75 respectively for these positions, this was a loss taken.  By the end of the week, the stock was at 67, so this was much larger loss avoided.

Next order of business was vacating a third of my SPY position which I did later Monday just south of 75.  Finally, I sold half my YUM position in each account for a small loss.

The only good thing I have going right now is last week's call to buy the GE March 10 puts. Having paid a buck for these contracts, i'm up 79% in just a few days time.  I expect this contract to double again when GE gets to 6 which I expect it will by March expiration.

As of Thursday, all those losses puts me down about -5% for the year in each account. Here are relative performances in other indices:

-5% ---- My performance
-16.65% ------ SP-500
-6.98 ----– Nasdaq 100
-18.17% ------ Dow 30
-21.32 ------- Russell 2000

If anybody out there is making money, please tell us how you are doing it.  Thanks.

ETFC – Stock was a low as 0.88 during the day.  With my cost at $1.30, i'm loosing faith in this position and may pull the plug on a close below 0.80. 

 LLL – Stock is dangerously close to crossing the lower range band to the downside and ending the bullish move that started on 12/5/08.   Considering a collar, buy stock, sell call, buy put.  More research required.

NEOG – No news, well in the money long term

QCOM – Wait for a rally to sell March Calls.  Holding up pretty well relatively speaking but may get taken down.

SPY – This position is problematic in i'm long about 3 lots with cost in mid 80's.  With all that was going on this week, I missed the opportunity to sell the breakdown (pink bar 4 back).  Clearly headed down to retest the low with probably much lower prices ahead.  More research required.

SXCI – Holding up relatively well, pharmacy benefits plan.

USO – Finally caught a bid on Thursday, but its going to take a lot of patience to get back to my cost basis at 36.5.

YUM – Holding up pretty well, will sell March 30 calls on any type of rally. Also close to range bands breakdown.  Watch carefully.

Overall 30% stocks, 70% cash and equivalents.  Stocks position down 11% since last week since I got shaken out of a lot of my longs.  It was a good week trading, not because I made money, but because I acted decisively to preserve capital.

I noticed last weekend that RIMM crossed the range bands to the downside, so I knew I was in for more pain.   On Tuesday, RIMM quickly broke down.  So I covered my Feb  50 short calls for 0.30, having been paid 3.00, this was a 2.70 profit.   Sold the stock I bought for 47.15 for 46.38 for a loss of 70 cents.  So I made +2.0 points in each account with this position and was the only profitable leg in the whole RIMM fiasco.

Next, I covered the Feb 55 calls.  Having been paid, 2.5, I covered for 0.05 for a gain of 2.45.  But I got crushed in the stock, having paid 52.5, sold at 45.40, lost 7.1 points on that.  So I closed this leg of the trade at -4.65.   

In retrospect, I think my mistake here was trying to do a covered call position in such a strongly trending stock.  Sticking with straight directional trading with would make more sense while leaving the covered call strategy with less volatile stocks like YUM and QCOM.

Washed out of CVC at 13.00, having paid 17.12, this was a -4.12 point loss.  I didn't really have a good exit plan for this trade and the results reflected that.

Sold ISYS – Plan was to exit on a close below 10.5 which I got on 2/17.  Extra slippage kicked in on the selloff and got out about 10.1.  Having paid 12.45, this was loss of -2.35.

Sold GHM – Plan was to sell on a close below 9.  More slippage kicked in and I didn’t get the sell off until about 8.40.  Having paid 11.45, this was a loss of -3.05.  Hard to believe this stock was over $100 less than a year ago.   

So all of the above results in a big -21.42 loss. At one point, I was up on all of the above positions.  But they all moved down after I sold them (most notably RIMM), so I did the right thing taking these positions off.

Option expiration was the bright side of the week, and I bagged these profits:

-       QCOM Feb 35 Call expired worthless - +1.20 gain

-       MYGN Feb 75 Call Assigned, Stock called away at $75 for  +4.70 gain

-       LLL Feb 80 Call expired worthless - +3.2 gain

-       YUM Feb 30 Call expired worthless - +2.7 gain

All that adds up to +11.8 which minimizes some of the loss from above. 

 

On the SPY, we have clearly breached the trendline to the downside, so a test of the low of SPY at 75 looks to be in the cards.  Looking for a sharp reversal rally back up to reduce position in the SPY and perhaps take an offsetting position in SH.

CVC – In the house of pain here having with stock at 13.90 having paid 17.12.  They offered to buy back some debt which gave the stock a lift on Friday.  Close to pulling the plug on this position.

ETFC – Nothing new this week, cost $1.3

GHM – Last weeks range band crossover was a false signal and we may have to say goodbye on a loss below 9, cost 11.50.

ISYS –Paid 12.45 will exit on a close below 10.50.

LLL – Bounced off the lower range band on Friday.  Once it becomes clear I won’t be called on Feb 80's, will sell March calls on the other half of position.

MYGN - Stock still looking good, will get called for a profit next Friday.

NEOG – No news, well in the money long term

QCOM – In the money on all around , may get called against short 35 calls.

RIMM – Still long 1 lot at 47 against short 50 call and 2 lots at 52 against 55 calls.  Trying to hang in there until Feb expiration, then roll short calls over to March.

SPY – Waiting for that rally to 90 to sell March calls and 100 to sell April calls.  Had an opportunity to sell those calls earlier this week, but overestimated the upside.

SXCI – Long 2 lots in each account now, cost 19. and 20.50, slightly in the money

USO – In the house of pain on this having paid 36.5 early this year.  I'm down 11 points on this position and still with it.  Clearly a case of loss avoidance.

YUM – Love those crunchy beef tacos, cost basis just under 29.

Identical positions in both taxable and 401K rollover accounts:

Overall 41% stocks, 59% cash and equivalents.  Stocks position down 5% due to RIMM fiasco.

I was a bruising week.  Monday picked up 2 more lots if RIMM in each account at about 60.  The breakout didn’t occur as expected, so I sold 2 RIMM March 60 calls against the position on Tuesday for $4 even.

Wednesday RIMM pre-announced bad earnings and the stock gapped down showing as low as 50 in the pre-open.  At this point, I am long 6 lots in each account with a 10-point loss so I’m looking at a $12,000 gap down at the open.  Fortunately, I’m short calls against 5 of those lots and only naked on 1 in each account. This is a healthy reminder that there’s always event risk, even when no earnings are due.

RIMM opened, briefly tested 50 and moved down.  The worst case scenario at this point is that the stock will get back down to 40 and the entire bullish case would be unwound. First, I sold the naked 100 picked up for 59.20 at 48.8 for a loss of 10.40.  In the retirement account, sold the other 100 cost 59 for 48.53 for a loss of 10.5

Next I covered the 2 short March 60 calls at .73 cents.  Having got paid 4, this was a 6.3 point gain for each account.   Finally sold the other 200 that I paid 59.90 for 47.90 for a 23.6 point loss.  In the retirement account, sold the other 200 paid 59.90 for 47.80 for a 23.4 point loss.

So I’m looking at losses of -27.60 in taxable account and -27.30 in the 401k rollover account on this position.  How’s that for a bad day?

This will likely wipe out my profits for Feb option expiration and put me down for the year.  So I went from up about 3% to down 2% for the year in one nasty day. 

Putting things in perspective, the S&P 500 is down 8% for the year and I’m down 2%.   Also, loss in the taxable account is slightly overstated since it doesn’t include the E*Trade bank account where the bulk of the spare cash is parked.

Plus I have some winning trades on the board for Feb option expiration due next week which should reduce the loss somewhat.  Barring any new blow-ups, we should have a better report next week.

No new positions this week other than a sizable CD purchase on the retirement side. It yields 3.3% FDIC insured and comes due on 6/30/2009.

Finally, I would like to thank Wordens for hosting this blog and including my blog in a customer e-mail.  I’ve been a customer for over 20 years and you guys rock!  Keep up the good work!

CVC – Hopefully finding a bottom here.  In the hole almost 2 points having paid 17.12., but I’m sticking with it.

ETFC – Looks like they are not going to get TARP funding, but I don’t care.  At my cost of 1.3, it’s basically a call option with minimal downside.

GHM – Decent rally showing a positive crossover of the upper range band.  Having paid 11.45 it’s a wash now minus commissions.

ISYS – Earnings out, need to review, paid 12.45

LLL – Company came out and raised the dividend this week!   In the money on both stock and short calls

NEOG – No news, well in the money long term

QCOM – Up channel remains intact.  Cost about 34.5, may get called on my short 35 calls  Add to at 34 and under.

RIMM – Added some more just below 60.  Could go much, much higher watch this and add to as it moves higher.  Already long stock and short calls, stock will be called.

SPY – Waiting for that rally to 92 to sell March calls and 100 to sell April calls.

SXCI – Added to this week, already  covered

USO – Nearly sold this on Friday, but it held the low.  Way down on this having paid 36.5 but I’m sticking with it.

YUM – Love those Chicken Quesadillas, cost basis under 35.

Identical positions in both taxable and 401K rollover accounts:

Overall 46% stocks, 54% cash and equivalents.  Stocks position up 2% since last week due to new positions in SXCI and RIMM.    

MYGN was the big winner on the week.  Earnings came in Tuesday better than expected and the stock rallied big and was up over 10 points.  Bought the stock last Thursday at 74.3 and sold the Feb 75 call for 4, so the most I could make on this position was 4.7 points. Nothing left to do here but wait for option expiration.

Finally, we got a good rally in the S&P’s. Since holding the recent lows, the SPY is bouncing off the bottom of a channel. Price-time pattern indicates we should see 92 in the March timeframe and 100 in the April timeframe.   Synopsis:  wait for a rally then sell March 92 calls and sell 100 calls in April.  I’m already long 3 lots of SPY in each account for an average price of 85.  May add longs next week if market remains positive.

Enjoy the weekend.

CVC – Chart action is looking sloppy and I missed the chance to sell some calls.  That aside, I am a customer and while they have a lot of debt, they are a solid company so I’m sticking with it.

ETFC – Record Daily Average Revenue Trades (DARTs) of 216,000, up 18% quarter over quarter.  Plus they added 97,000 accounts and now have over 4.5 million accounts.  There’s a profitable company trying to fight its way out from under the bad mortgage debt.  Look for another baby TV commercial on Super Sunday.

GHM – Earning are out and looking good.  Stock repurchase program added.  They sell to petrochemical industry so oil related.

ISYS – Closed below lower range band.  Earning due Monday, let’s hope for a pop or we will have to say so long.

LLL – Earnings were rock solid and don’t seem to be affected much by the economic downturn.  They did guide down for 2009, but the govt seems to have a lot of money to spend on C3-ISR (Command, Control, Communications, Intelligence, Surveillance and Reconnaissance).  Seems capped at 80 so short call should come in.

NEOG – Had a nice pop this week.  The peanut salmonella scare this week highlighted food safety.  May add some more

QCOM – Already covered below.

RIMM – Rally is getting tired, but I’m short calls all around so I’m content to wait it out.

SPY – Waiting for a rally to sell calls

SXCI – Nice upside breakout on Friday, next stop in the lower 20’s!

USO – Hard to see oil going much lower here so I’m going to let it ride. Looking for opportunities to add to energy positions this week

YUM – Already covered, love that Taco Bell

Overall 44% stocks, 56% cash and equivalents.  Stocks position up 2% since last week due to new positions in YUM, QCOM and MYGN.

It was a good week of trading. Overall, I wrote 6.4 points of option premium. If I get called on all positions it will add another 3.2 points of profit for a total of 9.6 points, not too shabby.

We finally got the expected Obama Rally.  After big upside action on Wednesday, I expected at least one day of follow-through taking us back up to 90 on the SPY.  No such luck however and 88 was the high for the week.  

Speaking of SPY, check out the way the 60 minutes range bands issued a buy back on 1/23 when it broke the upper band at 82.83.  Then it issued a sell on 1/29 when it broke the lower band at 86.26.   What more could you ask of a technical indicator?  Chart is courtesy of E-signal.  I have range bands code for that as an EFS file.  Let me know if anyone is interested and I’ll post that code.

Cramer would be proud of me in that I didn’t use a single market order all week, limit orders all around.

CVC – Stock is pulling back and close to support at the lower trendline and lower range band.   If this stock pull back much more, I may have to pull the plug.

ETFC – Earnings coming up Tuesday after the close.  Soft stop below 80 cents, still love the retail assets

GHM – Range bands went negative, but seems to be holding support at 9.  Earnings are coming up this Friday before the open.

ISYS – Close to lower range band like the company so I’m sticking with it

LLL – Still holding 2 lots and short 1 Feb 80 call.  Earnings due this Thursday before the open

NEOG – Animal and food safety.  Chart action sloppy but I’m a long term holder

QCOM – Missed my chance to reload on Tuesday when the stock briefly pulled back to 44. Look to reload anywhere below 44.5.

RIMM – Next stop is the 55 strike.  I’m now short calls in all my RIMM, so I’m letting it ride

SPY – Waiting for a rally to sell calls

SXCI – All the news is out and hopefully we will hold support right here at 17 bucks.

USO – This position has had my biting my nails all week.  It held the recent low at 27.7 so I’m sticking with it.  Important to realize that oil usually bottoms right about this time of year and peaks in July-August, so seasonality is in our favor.

YUM – Love that Taco Bell

LLLBP – Short LLL Feb 80 against ½ position

RFYBL – Short RIMM Feb 50 call against whole position

RFYBJ – Short RIMM Feb 55 call against whole position

YUMBF – Short YUM Feb 30 call against 1/2 position

CVC – Chart still bullish since range bands issue a buy signal back on 12/5/2008

ETFC – Terrible week for the financials, but I’m still a believer in ETFC as well as a customer

ETN – Covered this above already

GHM – Range bands went negative, and I’m in the hole 2 points, but not ready to throw in the towel yet.  This was a IBD 100 stock with good fundamentals.  Earning due out Jan 30.

ISYS – Chart still positive, fundamentals good.  Defense sector is one of the few industries that has not gotten crushed by the economic meltdown. 

LLL – Another defense industry player already covered above

NEOG – Animal safety play.  Stock has been very volatile lately but it’s a long-term winner and I’m sticking with hit.

QCOM – Love this company long term.  Half my position got called away, if stock gets back to 34, I will reload and sell the 35 call.

RIMM – Already covered below

SPY – Holding onto at close to cost.  Will sell 90 calls on a rally back up

SXCI – Health Care cost reduction play, similar to HMSY.   This an IBD 100 stocks, and Analysts raised targets.  Looking for a move into the 20’s.

USO – I’m deep in the hole on this position having paid 36.50 not long ago. Range bands flashed a sell on Thursday, and I should be out of this position already.  Oil’s not going zero, but I could easily see USO going lower.

YUM – Long term favorite, love Taco Bell.  Selling the 30 calls great since the stock closed at 29.90.  Will look to sell some new calls on any type of rally.

Stay defensive and trade well.

RIMM - I picked up another lot of RIMM in each account at about 47.20.  I was short the 45 calls, and in Thursday’s selloff, it quickly got back down to 45 and I had brief hopes by 45 calls might go out worthless.  But that was short lived and the stock bounced hard off 45 and moved quickly up.  I grabbed 1 lot and quickly wrote the Feb 50 call at 3.00.   Stock closed up 2 points so selling the call was premature.

A lot of times just before option expiration the stock moves quickly between strikes and we certainly saw that here between the 45 and 50 strikes.   Volume in the 55 and 60 strikes in the Feb contracts indicate we are looking for further upside action.

ETN – Bought 1 lot in each account at about 48.5.  This trade wasn’t particularly well thought out.  Earnings are coming out on January 26^th, so there’s some event risk.  I was planning to let it rally then sell some 50 calls.  I have to keep a close eye on this and either dump out on a close below the low of the entry bar ($46.90) or put on a short call position.

LLL – When I’m short calls, and the stock runs away, and I’m going to get called, I buy more stock and sell more calls.  That’s what I did here and as LLL moved higher, and bought 1 lot (100 shares) at about 78.95 and quickly sold the Feb 90 call at 3.10 and 3.20.  If all goes well, this position should pull in 4 points profit in each account by Feb 21 expiry.

LLL has earnings coming out on Jan 29, so we have some event risk.  The chart has been all bullish since a positive turn on the range bands back on 12/8.  A negative earnings picture could cause a sharp reversal.   Beware, stop loss below 75.

So between RIMM 5.7 and LLL 4.0, that’s almost 10 points of potential profit on the board for Feb.

The plan is to look for an Obama rally this week, then sell more calls.  Looking SPY to make its way back to 90.0, then I’ll sell Feb 90 calls.

Overall 40% stocks, 60% cash.  

It’s been a bruising week for the market and hopes for a smooth and uncomplicated 2009 have quickly been dashed.

First for the bad news, I got stopped out of my CSX position on Thursday at about $29.60.  Having paid $36.45 for it last week, this was a 6.85 point loss in just a few days time.  Ouch!  I sold it because:

1)    Broke the lower range band.  See my other posting on range bands

2)    Broke support at $30

So while I took my lumps on that position, I find it’s better to take a small or moderate amount of pain now rather than a lot of pain later.

On the bright side, January option expiration was a winner!

LLL -  Bought stock for 73.5, got called away at 75 plus 1.5 points option premium equals 3.0 points profit.  Still holding half of original LLL position with a nice profit.

QCOM – Bought stock at 34.5, got called away at 35, plus 1.4 points option premium equals 1.9 points profit.  Still holding half of original QCOM position and showing a profit.

RIMM – Was my big winner, bought 2 lots at 41.75, called away at 45, plus 2 points option premium X 2 equals 7.5 points profit!

SPY – Bought stock at 89.34, call expired worthless so I kept the entire 2.5 point premium

YUM – On the retirement side of the account, I sold 2 YUM January 30 calls against 2 lots I bought at about 28.95.  The option expired so I kept the 3 points option premium.

So overall, on the taxable side of the account, I pulled in just over 8 points realized profit in my taxable account and 11 points in the retirement account which is close to my goal of 10 points realized gain per option expiration.  For one lot, that would be about $1000 per month option premium income per account.