The Market Mon

RIMM Breakout

3/8/2010 1:13:00 PM

Research in Motion (RIMM) broke out today. This move is significant in a couple of ways.

First, the lower horizontal line represents the top of the candle after that huge gap down back in September of 2009. Since then the lower horizontal line as been resistance

The stock tried to breakout above this line back on 12/18/2009, but only got has high as about 71.60. More recently, 72 became resistance and the stock as been trying to breach the 72 level since about mid February, but with no success. After bouncing off some support at the 67.5 level, we had some higher lows, then today the stock popped decisively above the lower horizontal line - for the first time in 6 months!

A look at the earning estimates show a steady upward trajectory, and if the earnings work out that way, we could very well see a new all time high later this year.

Earnings are coming up March 31st, and that could be the event that causes the gap to be filled. We'll see.

QCOM - Below Daily and Weekly bands

2/7/2010 3:50:00 PM

QCOM is one of my favorite long-term stories in the technology space.

I was holding some last year, then I bailed out of it in the low 40's on a breakdown in the daily range bands.

From there it went positive on the daily range bands in early November and took off moving back to just under $50 a share in early January. And I was feeling like I missed the party.

I've made some money in past buying this stock under $40 and selling the 40 calls to generate income.

Seeing the breakdown this past week, on I picked up some at right about $39 a share. It ralled briefly and got as high as $39.70, but seems to find some resistance at $40. So I bailed out at about $39.55 and took a small profit. That turned out okay since the stock took out the $39 level and is now sitting a hair above $38.

The stock has now negative on the weekly range bands also for the first time since October of 2008. The low set after that selloff is just under $30, so the stock could go that low before finding a bottom.

Scroll down....

Cramer did an "Off-the-charts" segment on CNBC found here:

http://www.cnbc.com/id/35203109/site/14081545

Cramer likes the fundamentals and says the stock is a buy. He point out that the company has no debt and $11 a share in cash. He feels its still a great long term story, but the stock may not be done going down. He feels it will be "2 quarters in the penalty box" before its safe to fall in love with Qualcomm again.

Positions Review - 1/22/2010

1/24/2010 7:30:00 AM

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

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

XLB - Select Sector Materials ETF

1/11/2010 8:58:00 AM

XLB - Select Sector Materials ETF is the chart of the week. XLB picked up nearly 6% in the past 5 sessions versus only 2.8% in the S&P 500.

Let's drill into the components of the XLB to see where all the performance is coming from.

The screen shot below shows relative performance of the components of the XLB on a 250-day, 90-day and 5 day timeframes. We can see that the winners are coming from the steel and mining stocks, and to a lesser extent chemicals.

Steelguru.com reports shares of US steel manufacturers surged after a JPMorgan analyst forecast a continued rebound in steel prices fuelled by higher materials costs and some improvement in demand.

Positions Review - 1/8/2010

1/10/2010 7:43:00 AM

Here's my weekly review of positions.

AAPL - Stock was up about 2 points on the week and appears to be in a tight range. AAPL is #52 in the IBD 100 and still has a black box around it indicating its in a buy position. IBD's weekly blurb: "Easing, now 2% past 208.10 flat base buy point."

ABVT - This is a new entry from last week and I entered at 66.70, so as of this point, i'm down about 1.65 per share. Stock is #26 on the IBD 100, IBD's blurb: "Formed 3-weeks tight pattern with potential 67.10 buy point." Looks like I "top-ticked" my entry here.

AUY - Yamana, gold and materials all had a big run last Friday. Take a look at the way GLD bounced off the trend line and is now about 4% off the recent all-time high.

C - Citi has come back from a recent December low at 3.20 andhas now made a fine recovery back to the 3.59 area. Volume as been remarkably consistent this past week with just about 6MM shares trading every day. It looks to me like someone is accumulating the shares.

CML - Compellent bounced right off the top of the upper range band is now heading higher. Volume has definitely been anemic lately but has been pretty lame generally since the breakout day on December 18th.

DIA, SPY, IWM - The Dow-30, SP-500 and Russell 2000 all closed at 52-week highs. You can't deny the strength of this market, its onward and upward.

HMSY - This stock did a bit of a number on me this week. I picked up my first lot back at 42.35 and i'm up nicely from there. When the stock broke 50 back in late December, I picked up another lot in each account at about 50.40. Tuesday 1/4 the stock broke out convincingly and I was feeling good. Wednesday, the stock pulled back almost 2 points and I picked up another lot at 50.50. Then the stock rallied big out to another new high and I was up 2 points on that stock within a few hours time. Well I should have grabbed those 2 points while I had them, because it sold off after that and closed the week at 49.73. I realized looking at the intraday chart, that a lot of people were day-trading it. The stock has now had 4 straight down days on declining volume. I'm sticking with it.

MYRX - No news, stock is clearly in a downtrend on the daily. I should probably just take profits here and index instead.

NEOG - No news and the stock is marking time.

SXCI - I entered at 54.12 on the breakout day back on 12/21. The stock ran up to a new all time high but seems have found a lid at 55.75. From there it pulled back and closed the week at 52.10. Stock is #23 on the IBD 100 and IBD indicates "In buy range between 10-week average and new high."

USO - Oil had quite a week and USO is now above both the daily and weekly range bands. In the short term, its probably found a top here. Sticking with it as part of my overall energy exposure.

XLB - Select materials ETF made a new 52-week high and is looking pretty strong. This looks like a chart of the week type performance.

YUM - Stock is going sideways - no real news on the wires.

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

HMSY

1/4/2010 11:50:00 AM

HMSY is the chart of the week.

IBD ran an excellent piece on HMSY over the weekend in their 'View from the Top' column in their year-end special.

HMSY tracks billing and reimbursements for Medicare, Medicaid and private insurers. The company has technology that identifes billing errors and saves governments big dollars. The company operates 80% on a contingency basis, getting paid only if they recover funds. The company saves over 1 billion a year for its clients. Given the amount of money the government spends on health care (and will be spending forward) this company is well positioned for earnings growth.

On the technical side, the company broke $50 for the first time last week, then had brief pullback to the lower $48 area. I added to my position on the breakout last week and today the stock blased out to a new all-time high.

Positons Review - 1/4/2010

1/4/2010 11:20:00 AM

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

Target Allocation for 2010

1/3/2010 10:05:00 AM

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.

AAPL

12/28/2009 8:37:00 AM

AAPL is the chart of the week. After moving sideways in a wedge pattern, the shares blew out to a new all-time closing high last Thursday.

IBD ran a piece on AAPL in their Monday edition and called the breakout "quirky" in that the volume doesn't appear to confirm the breakout. But then the volume is factored for the shortened trading day, volume is up 65% on a "same time" basis.

On the fundamental side, AAPL has an IBD composite ranking of 99 with an EPS ranking of 97 and a relative strengh ranking of 85.

On the technical side, IBD indicates "Cleared 208.10 buy point from a flat base with a handle". They also placed a black box around the chart indicating its in good entry position. This is pretty significant and was one of 2 stocks in the IBD 100 with a black box this week. The other one was LULU.

Shares are up to 211 in the pre-market, so I expect a quick melt-up to 220 here before it takes a rest.

Positions Review - 12/24/2009

12/27/2009 9:53:00 PM

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

Compellent Technologies - CML

12/21/2009 9:02:00 AM

Compellent Technology (CML) is chart of the week. The stock made a new 2-year high Friday and made its highest close since its initial public offering back in 2007.

Up volume has been crushing down volume on both the daily and weekly charts. Also, the stock closed above the upper range band (lite blue bar) which is also a plus.

On the fundamental side, the stock has an IBD composite rating of 99. Earnings are not due until 2/11/2010 and i'm up about $1.10 per share since my entry back on 12/1/2009.

Positions Update - 12/18/2009

12/21/2009 9:00:00 AM

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!

Positions Update

12/13/2009 8:22:00 PM

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!

Positions Update

12/7/2009 1:28:00 PM

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.

Weekly Update - 12/5/2009

12/6/2009 7:15:00 AM

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.

Positions update

11/30/2009 11:23:00 AM

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.

Weekly Update - 11/27/2009

11/28/2009 10:11:00 PM

Welcome back Worden fans and Market watchers.

Global equity markets have had a tremendous rally, and this Thursday's news about the de-facto default of Dubai World was enough to drop the market's off their high perch and bring everyone back to reality.

The chart on the left shows DIA which (unlike most other charts) hasn't broke the daily range bands to the downside since the breakout back in July. The Dow-30 stocks are a great place to hideout in tough economic times.

Looking at the charts, the gap down in this past Friday's holiday shortened week did nothing more than bring us back to rest on the upper range band. So the Dubai world development on the chart side of things looks relatively minor. We need to monitor the longer time frames as things develop for signs of a trend change.

In terms of the larger picture, IBD still indicates "Market uptrend under pressure." They also point out in the "Inside the IBD 100" column, that the market appears to be consolidating and marking time. The only stock with a dark square (indicating its in a good buying position) is Mercadolibre (MELI).

That's it, see you on the postions update.

Positons Update - 11/20/2009

11/23/2009 6:37:00 AM

KO is once again chart of the week blasting out to a new 52-week high on Friday. I'm up up about 10% on this position since my entry at 52 back on 9/14/2009. My buddy Anthony pointed out a news story that KO was dropped from Costco stores due a price dispute. But that wasn't enough to keep the stock down.

Back to alphabetical positons review...

AAPL/APVAJ - Apple long stock and the AAPL Jan 150 call. In the money about 10 points on the stock, but down about 5 points on the long call.

AUY - Uptrend remains intact, but is being dwarfed somewhat by trend in the underlying as measured by GLD.

C - Daily is now clearly in a downtrend but weekly remains positive. Industry leaders GS, JPM, BAC are all displaying similar patterns. This tells me that is more of a sector issue at this point then a single-stock issue. But overall, this is about 2% of my portfolio. Since i've taken such as pasting from the financials, at this point i'm willing to let it ride.

I saw an interesting article about an upcoming accounting change that will affect the financials described here->

http://www.wealthdaily.com/articles/why-financials-really-are-in-trouble/2187?lloct=2

DIA - is a beautiful looking chart. Components AXP, DIS, JNJ, KO, MCD, MRK, PFE, UTX, WMT are all looking pretty. DIA is outperforming SPY lately, though still well behind SPY on a year to date basis. Sticking with it for now.

EEM - Chart is showing some distribution. This ETF is a slave to the global equity markets.

HMSY - Small amount of distribution here, nothing significant.

KO - Already covered above

MYRX - Last Friday, Piper Jafray upgraded Myraid Pharma from underweight to neutral. The company has a number of cancer drugs in the pipeline and the analyst says "...We view Myriad's pipeline as early and highly speculative."

NEOG - Neogen announced a 3 for 2 stock split for Stockholders of record as of November 30, 2009. Other than that, no news this past week.

SPY - Stock remains above both the daily and weekly range bands.

USO - Stock remains above both daily and weekly range bands, but the daily is pulling back slightly.

XLB - Select sector materials, remains above the daily and weekly range bands.

YUM - The company declared a dividend payable of 21 cents a share payable in February. The company targets paying out 35-40% of its earnings in dividends.

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.

Weekly Update - 11/21/2009

11/21/2009 5:17:00 PM

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.

Positions Update

11/15/2009 4:14:00 PM

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

Weekly Update - 11/13/2009

11/15/2009 7:27:00 AM

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.

Positions Update

11/9/2009 9:11:00 AM

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.

Weekly Update

11/9/2009 8:57:00 AM

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.

Range bands - downside rollover

11/1/2009 10:02:00 PM

Greetings Worden fans and market watchers. Most of the major indexes broke the 28-bar range bands to the downside on Friday. This is a major trend-following signal and its pretty significant that we are getting this signal in nearly every major index at the same time.

SPY went negative on the 28-bar daily range bands reversing a buy-signal issued back on 7/16. What does this signal mean and how good have the signals been historically? In a major bull-market such as 1992-1999, this signal will underperform buy-and-hold. But since this the start of the test period back in mid-2001, this system has out-performed by and hold by 174 to 92 or about 47%. Note these results do not include commissions or dividends so keep that in mind.

Other major indices that have rolled over are RUI-X (Russell 1000), RUT-X (Russell 2000) and RUA-X (Russell 3000).

Other major market leaders that have rolled over are AAPL (Apple Computer) and GS (Goldman Sachs). If this market is bringing down the leaders, the laggards don't stand a chance.

Our buddies over at IBD have changed to "Market in Correction" and the IBD-100 lost 8.2% for the week, its worst performance since October of 2008.

I'm not saying sell everything, just don't add any new longs and be very careful out there.

Have a great week and sleep tight.

Positons Update

11/1/2009 9:00:00 PM

HMSY is the chart of the week. On Friday, the company announced Q4 earnings of 30 cents a share beating Analysts estimates by 2 cents a share.

The company also raised estimates for 2010. Also, the chart looks great and broke out to a new all-time high on Friday. I'm up slightly on this position and they way things have gone lately, its time to sell! In all seriousness, this is a great company and i'm sticking with it.

AAPL/APVAJ - I'm now long 50 in each account of Apple just under 190. I'm also still long the Apple January 150 call and in the hole about 15 points. I'm in deep dudy on the Jan 150 calls and we'll see what this week brings.

As I pointed out in the weekly update, Apple crossed the 28-bar range bands to the downside on Friday. So the trend is now downward. The upper range band is now almost 198 so we could well see a rally up to that point and the downtrend could sta intact. Also, Seeking Alpha ran a story listing a 1/2 dozen reasons why the stock should be $80 a share. As Cramer would say ouchy.

ABVT - Abovenet - Earnings due out after the close this coming Thursday November 5th. Chart is showing some signs of distribution and I missed a beautiful change to sell and take a $5 per share profit this past week at $53. Maybe next time.

AUY - As expected, I top-ticked this trade completely and i'm now in the hole about $1.68 on this position. But its only 100 shares, so i'm sticking with it. Its my gold play and resource inflation play.

C - Citi lost its slugout with the 28-bar daily range bands and finally broke below that line this past week, buts its still hanging above the 28-bar weekly range bands. Citi goes negative on the weekly range bands at 3.02. With cost a 3.82, i'm still in the money, but not for long.

DIA - I'm in the hole on this position on with recent cost at 100.80. I topped-ticked this trade in the worst way.

EEM - Emerging Markets ETF. I'm in the hold about a buck-fifty, sticking with it.

HMSY - Already covered above - call me Mr Brightside.

KO - Still up on this position with a cost at about $52. Crosses the lower range band at 52.88 and i'm gone.

MYRX - This MYGN spin-off broke below the lower range band on Wednesday but it took me until now to notice. iStockAnalyst.com had an interesting piece about how corporate spinoffs are typically a great buy and cite MYRX as an example.

NEOG - Stock had a higher-volume sell day on Friday, but help up pretty well all things considered. Good article in Flexnews.com (Business news for the food industry) about how the company is take a slow and steady approach to its business in China.

SPY - Down about a buck and a quarter, but just got a $50 dividend payment which is about one-half of one percent of the position. And i've only held it for under 2 months, so that's about a 3% dividend yield annualized.

USO - This EFT has been a great performer recently, and i'm up about 7% since my entry at $36.50. This is another inflation, commodity related plan and i'm sticking with it.

XLB - Select Sector Materials, down about 6% just under $2 on 200 shares, and i'm sticking with it, again materials as an inflation hedge.

YUM - Just go back from Taco Bell and i'm a long-term fan. Okay, same-store sales are flat in the US, but they are kicking butt in China. Think outside the bun.

CD Listing - Looks Like Wamu comes due tomorrow..

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!

Weekly Update - 10/30/2009

10/31/2009 11:58:00 AM

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.

Positons Review

10/26/2009 9:41:00 AM

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!

Weekly Update - 10/24/2009

10/24/2009 5:20:00 PM

AAPL was my big winner on the week.

After a brusing year of taking losses, I finally got a break by being long 100 shares of AAPL into earnings. With my cost at 186, I was nervous going into earnings and nearly took a small profit when it closed Monday at 190. But my buddy Anthony reminded me that every time he goes to the Apple store, the place is packed.

Well the rest is history and AAPL gapped up over 12 points and closed the week at a new all-time high of 203.94. After Jim Cramer of CNBC's Mad Money upped his price target to $300 a share, I doubled down down and picked up 1 contract of the Apple January 150 call in each account at 55.20. With this trade, I have the same upside (and downside) as buying another 100 shares in each account at about a quarter of the cost.

The rest of the market was a bit of a mixed bag with the DJ-30 closing alternately above and below the 10,000 mark but in the end closed just a hair below 10,000 at 9972. IBD switched their market outlook to "Uptrend under pressure" due to a growing number of distribution days.

On Monday, I picked up 100 DIA in each account at about 100.80. This was an effort to increase my general market exposure to good quality companies. With the kind of year the markets have had, both hedge funds and mutual funds are going to be under a lot of pressure to stay fully invested into their year ends. So its seems like a forgone conclusion at this point that the market will be higher at year end than it is now.

Also on Monday, I picked up 100 shares of HMSY in each account at about 42.35. I saw a cup with a handle forming and HMSY is now positive on both the daily and weekly range bands.

On the development side, I'm checking out demos of Interactive Brokers Web and Java-based platforms. I've spend almost $4000 of commissions with E*Trade this year and if I used Interactive brokers, that would have been about $400. I could think if a lot of better things to do with the other $3600!

Thanks all for now, have a great Saturday and stay tuned for the positions update.

Positions Update

10/19/2009 8:27:00 AM

USO was the chart of the week with a monster breakout of the $40 level. This brought the major Oil ETF up to values not seen since November of 2008. This was on the monster slide in crude from $147 a barrel all the way down to just under $40 a barrel.

For now, i'm happy since my cost in this position is about $36.50 a share.

Back to alphabetical positions review.

AAPL - Earnings are out Monday after the close. My cost is just about $186.30 so i'm up slightly. But i'm pretty nervous about this position as the stock seems to have met some resistance at the old high at $190 back in May of 2009.

ABVT - Things are looking good with this IBD 100 name and the stock got as high as $51.57 this past week before cooling off a bit. Accumulation remains positive as the green bars continue to swamp the red bars. No news this past week.

AUY - Yamana gold bounced off the upper range band and is just above my recent entry at $12.25.

C - Earnings were out this past week and it was a mixed bag. On the positive side, revenues in their transaction services business were at record levels. On the negative side, they are selling profitable businesses such as Smith Barney and Phibro (commodities unit) because of political considerations. I'm sticking with it for now because I have faith that somehow, someway, this will become a profitable company.

EEM - Emerging Markets ETF, chart remains positive.

KO - This chart is a thing of beauty up 6 straight days. Its cousin PEP is also looking strong.

MYRX - Stock made a good move this past week on some positive fundamental news. The company announced a Investigational New Drug to treat Cancer, Obesity and Diabetes - targeting a molecular target, the protein kinase IKK epsilon. I don't know what that means bu the market liked it and the stock was up 9% on the week.

NEOG - Company was named to Forbes list of top 200 small companies. Also, news as of 10/12:

"Neogen Corp. has announced formation of a Brazilian subsidiary, Neogen do Brasil, headquartered near Sao Paulo, to distribute its food safety products throughout Brazil.

Brazil is the world's fifth-largest economy and one of the world's largest food producers and exporters, and it is the world's largest exporter of beef, poultry, soybeans, sugar, coffee and orange juice, according to the announcement. The subsidiary will "accelerate the success of Neogen products in Brazil," the announcement said.

Neogen do Brasil will have initial sales totaling 1.7 million reals ($1 million, U.S.). Neogen also has distribution subsidiaries in Scotland, Germany and Mexico, and derives 41% of revenues from its operations outside the U.S."

SPY - Up nicely on this position and sticking with it.

SXCI - Chart is a thing of beauty. IBD says: "Bangs out new highs, but is extended from all buy points." Earnings due 11/5. Thomas Weisel downgraded the stock but raised its price target to $47.

USO - Already covered above

XLB - Possible double-top in the making here. Select sector materials, inflationary play.

YUM - Daily, weekly range bands both positive.

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!

Weekly Update - 10/16/2009

10/18/2009 1:09:00 PM

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.

Positions Review

10/12/2009 6:48:00 AM

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!

Weekly Update - 10/9/2009

10/11/2009 9:48:00 AM

Greetings Worden fans.

Gold was the big story this past week. I'm not much of a gold bug, but I couldn't resist the breakout and bought 100 shares of AUY in each account on Wednesday at about 12.24. That was my only trade for the week.

This trade was screaming "Top tick" when I made it hence the small number of shares. I will be looking to add to this or related position on pullbacks.

My good buddy Dr Cthruu (http://cthruu.blocks.com/) did an excellent post on gold on his blog. He's got a target on XGLD of 1220-1250 from here which is a screaming 20% higher that where we are from here. So I will be looking to add by perhaps buying positions in GLD on any type of weakness.

The Doctor is loaded up on UGL (Ultra-Gold) but i'll take the more conservative tack and go with the regular fund since i've had some sub-par experiences with the Ultra funds.

Gold aside, SPY had a smart move off the lower range band this past week and raced higher with 5 consecutive up days. But notice that the volume on this rally was ligher that the volume on the selloff from the week before. You can see clearly on the size of the volume bars on the chart on the left.

IBD remains in "Uptrend under Pressure" status in terms of its big picture market outlook. So caution remains the watch word for now.

Third quarter earnings gear up this coming week. Comparisons should be easy versus last year.

IBD poses the question perfectly, is the rally over or is it just half-time? My vote is half-time, but i'm not making any bets in either direction unless confirmed by the price action.

On a different note, i'm building a following on my Zulutrade/Forex blog at http://zulumon.blogspot.com where i've a good amount of activity this past weekend. Take a look. See you later on the positions update.

Positions Update

10/4/2009 9:49:00 PM

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!

Weekly Update - 10/2/2009

10/3/2009 8:31:00 PM

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.

Positions review

9/27/2009 1:36:00 PM

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

Weekly Update - 9/25/2009

9/27/2009 8:53:00 AM

It was a nasty week the equity market. Nasty because i've been getting pulled in on the long side by bullish chart action. In fact on Wednesday I was feeling really good and my open positions were up nicely. Based on those unrealized profits, I had made back about 1/3 of what I lost for the year, and my account was finally on an upward trajectory. Unfortunately, that was the top and the market turned south and wiped out about half of my gains.

Let's go to the trade-by-trade.

On Monday, last weeks breakout buy of SXCI at 45.50 was working out well, so I added another 100 shares in each account at about 47.50. By the end of the week, the stock pulled back to 46.35. So i'm close to even on this position, down perhaps a half a point. Stock came to rest right at the upper range band.

Also on Monday, I saw my profits in AAPL start to disappear. After paying in the low 179's last week and being up almost 6 points in a matter of days, AAPL started to sell off. So I closed the 100 shares I bought in each account in the low 182's and took about 3 profit points per 100 shares.

A mere 2 days later, AAPL was once again on the move so I picked up 1/2 lot (50 shares) paying about 187.80. I knew at the time that I was badly top-ticking this trade, that's why I bought only a half position. As expected, AAPL pulled back and I picked up another 50 in each account on Thursday at 184.87. So my average cost now is about 186.30. Stock closed the week at 182.37, so i've give back profits on my earlier trade and then some. Objective for next week is to get out at a small profit.

One bright spot of the week was RIMM. I picked up 100 shares in each account last week at about 83.50. Knowing I was holding a loaded gun going into earnings, I sold those shares at about 84.30 on Thursday. Well it turns out I dodged a bullet here since the stock closed the week at about $69 on some bad earnings news. I have to hand to IBD, they correctly pointed out that RIMM was due to report its 6th consecutive quarter of declining EPS growth. I wrote that in last week's positions review, and that was enough awareness for me to sidestep this oncoming diesel train.

Next up was Chinese on-line game maker Perfect World - PWRD. After last week's entry at 44.35, I was feeling good and the stock was rallying big. So I picked up another 100 shares in each account at 47.60 on Wednesday. But later in the day Wednesday, I was feeling good as the stock got as high as 50.50 and was up nicely on both positions. But by Friday, things had turned around and my $700 profit turned into a $400 loss as the stock closed the week at about $44. But i've been shaken out of this stock before and i'm going to try and stick with it. If it gets much below $40, i'm going to have to take my lumps.

I read later in the IBD that Shanda Interactive spun off their On-line gaming division in a separate IPO. Priced at $12.50 the offering was poorly received and the offering close the day at 10.75. PWRD clearly sold off in sympathy with that move.

The trade of the week was ABVT. You may recall I was in and out of this IBD 100 name earlier this year on some good price action. Well after the 2/1 split at $90 the stock cooled off and built a base at about $45. Well the stock broke out mid-week and I picked up 100 shares in each accout at a limit of $48 on a nicely timed pullback. This buy worked out well and the stock was as high as 50.40 on Thursday. Like my other buys this week, the market pulled back and took away some profits. But the stock closed the week at $48.59, so i'm still feeling good about this position.

At this point, my confidence in ability to make money in the market is low. So low i'm considering pulling cash out my E*Trade accounts and paying down my mortgage!

Enjoy your Sunday Football - Jets vs Tennesse Titans at 1PM EST. Lets go J - E - T -S Jets, Jets, Jets!

Positions Update

9/21/2009 9:16:00 AM

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!

Weekly Update - 9/18/2009

9/19/2009 8:00:00 AM

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.

Positions Update

9/13/2009 9:43:00 AM

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

Weekly Update - 9/11/2009

9/12/2009 8:43:00 AM

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.

Positions Update

9/7/2009 9:55:00 AM

C - Daily chart made a key reversal on Thursday and found support right at the upper range band. Most of the news this week was actually ordinary capital markets activity which is a good thing.

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 - Not much doing this week, gave back some recent gains.

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NEOG - Stock broke $30 to a new all time high on Wednesday on some China related news. It was the highest volume day since early February. It gave back some gains and settled right at $30 on the week. This is a bullish sign, so but this stock is a sleeper and we will look it add at a lower price.

QCOM - Chart shows some big distribution going on. Love its prospects long term and sticking with it.

SH - New short position entered this past week. Will probably bail out next week or offset with some longs.

USO - Feels like it wants to go lower, and its sitting right on the lower range band which turns negative at 34.81.

YUM - Daily range bands went negative this week, but haven't been a particularly good indicator anyway.

I watched Elaine Garzarelli on NBR: she's bullish and likes Housing $XHB, Industrials $XLI, Materials $XLB and Emerging Mkts $EEM. Will take a look at those along with the IBD.

Off to read IBD pool side, enjoy your labor day.

CD Listing - Now sorted by expiration

Taxable

LEHMAN BROS FSB WILMINGTON DEL 5.10% 09/08/2009

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

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

Weekly Update - 9/4/2009

9/5/2009 5:26:00 PM

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.

Weekly Update - 8/28 /2009

8/29/2009 7:38:00 AM

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.

Positions Update

8/23/2009 7:45:00 AM

ABVT - Holding onto recent gains and is marking time for the 2x1 split which is due Monday AM. I woke up Saturday to see last trade a $0 and a big hole in my account. I'm sure they will resolve this Monday and credit me for the new shares. Up almost $10 since my recent entry at $85.

C - Already covered in my weekly update. Stock has been volume leader on the NYSE almost every day this week. There was also a comment circulating on Twitter that this stock has 5.5B shares outstanding an 86K shares outstanding short interest. Less than 1% short interests is pretty low indicating the shorts are almost totally out of this stock. Cost at $3.97 so i'm up nicely.

LFT - Earnings came out this week and disappointed. The stocks sold off hard but found support at about 24.50. Stock clearly blew through my supposed stop at 29 on a large gap on Monday. The sell-off also brought in supporter Goldman Sachs who raised their target price to $34.

MYRX - No news this past week for the spin-off from Myriad Genetics.

NEOG - Earnings came out Friday and stock bounced nicely off the low at $27. Need to listen to the call.

QCOM - Bounced off the lower rance band as shown in the chart above. It was a good week for telecomm stocks and QCOM is clearly a part of Jim Cramer's mobile internet cohort.

SXCI - Stock has been up, up and away since the huge gap-up back on 8/6/2009. Stock might be in what IBD calls a 'Climax Run' where it doubles withing a 6-week period. If that's the case, we could see $60 within about 4 weeks. Also been watching IBD 100 name Catalyst Hearth (CHSI) which is also provides Pharmacy Benefit Management (PBM) services. One half of my position got called away at $30 and i'm looking to reload this coming week.

USO - Oil had a nice run this week as Oil futures hit a new high for the year. The start of the North American Hurricane season has observers on edge also since the geo-political risk seems muted.

YUM - Bounced off the bottom of the range bands this week in a very similar fashion to QCOM. UBS cut YUM from "buy" to "neutral" back on 8/11/2009. I'm sticking with it.

CMGIA/CMGIT - This is the Sept 100/105 call spread entered for $1.5. Stock found some support at $85 and is once again asserting some upward bias. Sticking with it but its going to take a pretty signficant move to get this position back into the money.

CD Listing - Now sorted by expiration

Taxable

LEHMAN BROS FSB WILMINGTON DEL 5.10% 09/08/2009

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

1ST COMM BK NORTH LAS VEGAS 5.15% 08/28/2009

AMCORE BK N A ROCKFORK ILL 5.0% 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

Weekly Update - 8/21/2009

8/22/2009 1:42:00 PM

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.

Positions Update

8/16/2009 5:06:00 PM

Leading off with the Options Express account again. This past Monday I closed out my RIMM August 70-75 call spread for a profit of $92. For an investment of $218, this was a pretty good percentage profit. My other 2 positions are going into the red however.

CMGIA/CMGIT - This is the CMG Sept 100/105 call spread entered for a debit of 1.5. This position has a max profit of $350 and a max loss of $150. Stock sold off hard and closed at 87.95, close to the 50-day Moving Average.

At this point the position looks like a loser, so I'm just going to let it ride. I could close out the (profitable) short 105 call, but that's only going to increase my max loss from $150 to $175. Of course, it would leave me long the 100 call, but that looks like it will go out worthless. Of course, September is a long way off and a lot could happen.

CQNHM/CQNHN - CERN August 65-70 call spread I put on 3 weeks back for a debit of $180 with max profit of $320. The August short 70 call is at 10 cents, so i'm likely to close out the short call and go naked long the 65 call with only 5 days left, its a roll of the dice, but I can do so by adding only $10 to the max loss on the trade.

Now back to E*Trade.

ABVT - Stocks is pretty well extended to the upside. 2 for 1 split due this Thursday and I expect to cool off after the split.

C - has been getting a lot of press lately and is apparently in play by a number of hedge funds to the upside. Word is that Hedge Fund manager Eddie Lambert is long 19 million shares. I just got the shareholder info and a reverse split is in the cards.

LFT - This IBD-100 name has earnings due on Tuesday. IBD indicates "Breakout stalls after 1st day - but remains above the 29.38 buy point." Sticking with it an holding on tight through earnings. Stop loss not far below, however.

MYRX - Zero cost leftover from MYGN debacle. Not much doing this week.

NEOG - Stock action is looking sloppy With cost at $15.50 in my retirement account, and $22 in my taxable account, I may take profits this coming week.

QCOM - Marking time right here at the 50-day moving average. Part of Cramer's Wireless Internet build-out cohort, so i'm sticking with it. With strikes at every $, I may sell and out of the money August call if we get a strong day this week. We ususally get one strong upside day the week of option expiration, so I will be looking to sell calls on that rally.

SXCI - Stock moved from 38 to 41 this week which was a bit of a pleasant surprise after last week's 30% gap upward. Sticking with my long

USO - Stock sold off hard on Friday and appears be topping here. Looking to add a longside hedge if we get a high-volume rally day this coming week.

YUM - Had a high-volume distribution day on Tuesday when it got downgraded by UBS. Will also look to sell an out of the money call on half of position on any type of rally this week.

XZQHF/XZQTF - This is the zero cost collar I put on on half my position for even money. The good news is I get to sell half my position in SXCI at a small profit. The bad news is that if I had done nothing, I would be up an extra $1000 per account. So i'm going to just let them have half my position in SXCI for a small profit and move on.

CD Listing - Now sorted by expiration

Taxable

LEHMAN BROS FSB WILMINGTON DEL 5.10% 09/08/2009

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

1ST COMM BK NORTH LAS VEGAS 5.15% 08/28/2009

AMCORE BK N A ROCKFORK ILL 5.0% 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

Weekly Update - 8/14/2009

8/15/2009 8:33:00 AM

Overall 48% high-yield CD's, 27% cash and 20% stocks. The market took a breather this week after 5 straight up-weeks.

ABVT was the winner of the week. Earnings came out Tuesday and the stock took off nicely. I'm now up almost 10 points on this from entry back on 8/11/2009. Stock has a 2x1 split due this coming Thursday 8/20/2009.

ABVT broke decisively higher on Friday, and will look to double-down on any kind of weakness. CEO says: "Don't come to me for voice or a DS-3 or 10-15 MB. Come to me if your already at 100-MB and you want to go to 10GB to 40GB."

This company delivers point to point Fiber links for low-latency, high-performance private networks. This company is en fuego. Go to http://www.above.net and click on Investors. Listen to the Oppenheimer Internet Conference playback.

On Monday, I closed out my long position in MFE in each account for a profit of about 65 cents. I like this company long term, but at this point, I was just trading conservatively and reluctant to let a profit turn into a loss.

I did 2 other trades this week. On Wednesday, I bought 1 lot of LFT at $31.50 and 1 lot of PWRD at $40.90. Both are IBD-100 stocks with a composite rating of 99, and recently broke out to new all-time highs. By the end of the week, both positions were down, and I closed out PWRD at 39.65 on Friday for a loss of $1.30. I'm still with LFT, but with earnings due on Tuesday, i'm feeling a but vulnerable.

On Tuesday a CD came due and I went shopping and picked up FARMERS & MERCHANTS BK TOMAH WIS C/D FDIC INS TO LIMITS 5.25% 07/12/2010.

One thing i've noticed - depending on the way the CD is priced - you will pay a premium from the offer price. For example for a 20K CD, you get debited $20,260. When the issue comes due, you get the interest $535 and the original $20,000 principal amount. But you were debited $20,260, you are now showing a $260 capital loss which can be used to offset other gains. Anyway, the 1.36% yield times 4 (since it was only a 3 month CD) equals 5.4% yield on an annual basis which is not to shabby.

USO - Daily and weekly range bands pointing up

8/9/2009 11:51:00 AM

USO went postive on the daily range bands last Friday 7/31 at 36.80. The weekly bands have been postive since early June, albeit at a higher price - about 39.10. So at this point, both the daily and weeklys are pointing up once again.

In terms of trend reversals, the daily goes negative at 33.90 and the weekly goes negative at 26.70. So bias is to the upside, but tempered slightly by the counter-seasonal trend for Oil to decline between now and Feb, 2010.

So sticking with my long for now and looking to add a bullish position.

Positions Update

8/9/2009 8:06:00 AM

Leading once again with Options Express account where I added a call spread in CMG this past week.

CMGIA/CMGIT - This is the September 100/105 call spread entered for a debit of 1.5. This position has a max profit of $350 and a max loss of $150. Stock had a small pullback but seems to have found support in the 92 area. IBD still likes it and its one of the few stocks in the IBD 100 with a black square around it indicating its still in a buying area.

CQNHM/CQNHN - CERN August 65-70 call spread I put on 3 weeks back for a debit of $180 with max profit of $320. The position is looking more likely to go out at a loss.

RFYHN/RFYHT - This is the RIMM August 70-75 call spread that I put on for a debit of $218 with a max profit of $282. Gave back some profits on this position, but (as i've found) I don't make the maximum profit until expiration, so I have to squeeze all I can out of this position to offset my loosing option trades. If its starts to threaten the 75 strike, i'll think twice about that and take what profits are there.

Back to E-Trade.

ABVT - Pickup up half a position this past week and its showing a small profit. Company has a 2x1 split with record date of August 20th. Also earnings are due out Monday. Yikes - didn't realzie that when I bought it - need to be more careful.

C - Stock had its biggest volume day ever in its history on Thursday when over 2 billion shares changed hands. That's almost 20% of the 11.2 Billion share float. That suggest some serious accumulation going on. Sticking with it.

MFE - Stock is taking a breather here, and threatening my small profit. I'm going to put a mental stop at $42.50 to protect my small profit. Options premiums seem pretty low here for example the Sept 45 call is only paying $1 so it hardly seems worth writing that position going in the fall.

MYRX - Not much going on here in this MYGN spin-off. Volume has been drying up in the absence of any kind of news.

NEOG - Stock had a nice bounce-back after shaking me out at $27 which was the bottom of the move. No news this week.

QCOM - is cooling off along with the rest of the Nasdaq. Stock has been down 9 of the last 12 days since the high-volume selloff back on 7/23. Cost basis under 40 so i'm up nicely. August 46 collar selling for even money, but 46 is the bottom of the channel so i'm looking for support here.

SXCI - Already covered in my weekly update. I'm up over 100% on this position since entry back on 1/2/2009.

USO - Stock is now above the declining 200-day MA and above the rising 50-day MA. Also, daily and weekly range bands went postive last week. Sticking with it despite a seasonal bias for a decline this time of year through Feb 2010. USO deserves its own post.

YUM - is right at the top of the channel at 36.5 after I picked up another lot in my reitrement account at the bottom of the channel at 34. August 36 collar can be entered for a credit of 55 cents but i'm likely to just let it ride.

XZQHF/XZQTF - This is the SXCI August 30 collar put on for even money. I'm down horribly on this position, so i'll let them just have the 100 shares of SXCI and this position will go away. In exchange my large unrealized gain on half my SXCI will go away and become a small realized gain.

CD Listing

Taxable

FEDERAL TR BK FSB SANFORD FLA 5.40% 08/11/2009

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

LEHMAN BROS FSB WILMINGTON DEL 5.10% 09/08/2009

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 5.60% 07/21/2010

Retirement

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

1ST COMM BK NORTH LAS VEGAS 5.15% 08/28/2009

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

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

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

Weekly Update - 8/7/2009

8/8/2009 12:40:00 PM

Overall 23% cash, 53% high-yield CD's, 25% stocks. Stocks position up due to some long entries. The equity portion of my portfolio was up about 2% on the week.

SXCI was the runaway winner on the week, blasting to new high on monster volume. The only fly in the ointment was that I collared 1/2 half of my position at 30 for even money on Tuesday. So I was long only 1 lot in each account for the ride.

Citi (C) was also a pretty good winner on the week, up 21%. The company is selling off a bunch of assets. Also, at the rate this company is cutting costs its only a matter time before they start making money again.

Pretty much everything I did this week was better left undone, and only ended up costing me money.

On Tuesday, I picked up a 1 lot of CVGW in each account at 20.90. I saw a nice saucer forming in this IBD 100 name. Then on Thursday and Friday, the stock sold off hard on higher volume and triggered the IBD 8% rule. I exited at 18.18 only 2 days later. Ouch!

Similar situation with NEOG, where last week I picked up 1 lot in each account 30.25 on a break above the recent range. I sold these at 27 even this week, again hitting the IBD 8% sell rule.

Lesson learned is that I have to be MUCH more selective. Don't trust breakouts from the range unless volume is at least 40% higher than normal. Otherwise it could be a head fake. Between NEOG and CVGW, it cost me about $600 per account to find this out. If I never make this mistake again, it will be well worth the cost of this loss.

One new entry that I did end up sticking with was ABVT. I bought a half position in each account at 85.30 on Tuesday. The stock closed the week at a new all-time high of $86.95. 2 for 1 split due later in August.

Gorgeous weather in the NYC area today, so i'm out to enjoy it!

Positions Review

8/2/2009 9:24:00 AM

Leading again this week with the Options Express account. OX is growing on me since they cut my comissions and I haven't funded the Think or Swim account yet.

CQNHM/CQNHN - This is the CERN August 65-70 call spread I put on 2 weeks back for a debit of $180 with max profit of $320. Checking the chart on the left, up volume continues to outpace down volume, so i'm sticking with it.

RFYHN/RFYHT - This is the RIMM August 70-75 call spread that I put on for a debit of $218 with a max profit of $282. All we need is a close above $75 on August expiry and I make the maximum profit on this position

Now back to E*Trade....

C - Citi shows some signs of life this week as they completed their preferred to common conversion. Also some big index buying came in on Friday according to CNBC. Sticking with it.

DIA - Long 1 lot in my retirement account. The broad indices are clearly under-represented in my account.

MFE - Already covered in my weekly update. Watching for signs of distribution and possible add-to on a pullback. Stock dropped out of the IBD 100 this week which is a warning sign.

MYRX - Up slightly this week. This is a zero-cost basis leftover from the MYGN debacle.

NEOG - Added another lot this week when the stock broke above 30 after weeks of consolidation. Stock fell back, so it may have been a false breakout.

QCOM - Some low-volume distribution going on according to the chart on the left. With options at every strike, I can now sell the 46 collar (and below) for a credit. Options activity was dominated by the 44 puts which traded over 4000 contracts on Friday. There's an option trade here somewhere, more to come.

SXCI - Stock recovered from a pullback to 28 to close around 29.50. No news this week, earnings before market hours this coming Thursday.

USO - broke the 28-bar range bands to the upside on Friday so i'm sticking with my long.

YUM - Addition of lot in my retirement account 2 weeks back at 44 was a good move as the stock closed Friday at 35.46. Stock is petering out here, so it may be time to see some calls or perhaps a call spread.

My CD "WASHINGTON MUT BK HENDERSON NEV C/D FDIC INS TO LIMITS DUE 07/31/2009 5.150" came due on Saturday, so i'm looking to reload next week on something that pays 5%.

CD Listing

Taxable

FEDERAL TR BK FSB SANFORD FLA 5.40% 08/11/2009

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

LEHMAN BROS FSB WILMINGTON DEL 5.10% 09/08/2009

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 5.60% 07/21/2010

Retirement

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

1ST COMM BK NORTH LAS VEGAS 5.15% 08/28/2009

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

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

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

Weekly Update - 7/31/2009

8/2/2009 8:37:00 AM

Overall 24% cash, 53% high-yield CD's and 22% stocks. The market continued to push higher this week leaving me further behind the indexers and asset allocators. But nearly everything I did worked out this week and you have to be grateful for that. Also, i'm learing to trade around earnings instead of being blindsided like I have in the past.

BTW, you can follow my updates on Twitter at https://twitter.com/tcxmon.

On Wednesday, I picked up 2 of the DIS Aug 26-24 put spread for a debit of 0.60. This position cost $120 with a max profit of $240. I got this idea from the Options Action TV show on CNBC. Earnings came out Friday and the stock sold off. I closed the position for $160 for a small profit. I did this trade in my Options Express account where spread trading is a breeze. The same position in E*Trade would be a chore to complete.

On Thursday, my old friend NEOG broke above resistance at $30. I picked up 1 lot in each account for about 30.25. This may have turned out to be a false breakout as the stock closed the week at 29.15. I've been a stockholder for many years and I believe in this company. Also, up volume has been exceeding down volume, so this is possible a cup-with-a-handle in the making.

The winner of the week was McAfee. Having paid $41.95, I tried to sell the 45 collar (short 45 call, long 45 put) for even money ahead of earnings. I didn't get a fill, but came within 15 cents. Anyway, the stock sold off hard after earnings to 42.5. But then it came roaring back on Friday and even made a new intraday 10-year high!

McAfee is firing on all cylinders. If you listen to a single earnings call this week, listen to this one at at https://investor.mcafee.com/events.cfm. The company had double-digit growth rates in both its consumer and corporate business with profit margins in the 80% range. Smoking! Also, and increasing number of high-profile network attacks and cyberterrorism puts this company in the right place at the right time. Staying long for now but watching for signs of distribution.

Recall that last week I sold my position in HMSY. This was a good move as the stock got whacked when earnings came out on Friday. I took the opportunity and bought 100 shares in my retirement account at 37.80 and 100 in my taxable account at 38.20. The stock moved up right away so I took profits and bagged $75 in my retirement account and $125 in my retirement account on a day-trade.

Here's some of what i've learned this year - don't be afraid to take a profit on signs of distribution, especially ahead of earnings. Also, don't be afraid to take a small profit when they present themselves. I've seen many good profits turn into nasty losses this year and could have avoided the MYGN debacle had I observed these rules.

Have a great week.

USO and Range Bands

7/30/2009 9:22:00 AM

USO is a tradable that seems to respond well to my favorite indicator - Range Bands. I did some rough optimization and found that USO gives much better results when using the 28-bar range bands versus my default of 12-bar.

Its hard to see on the chart on the left, but for buy-and hold, USO is worth only $49 for an initial investment of $100 since its inception. When trading using 28-bar range bands USO is worth $155.00 And that's for long-only positions. I had some trouble with Backscanner getting it to simulate short positions or the difference would have been much more dramatic.

Note that for most of the history of the chart, buy-and-hold had comparable returns versus the range bands. On the sell-off from $150 down to $30 Oil, the range bands pulled way ahead because the were flat for that sell-off.

Note that for range bands went short on USO at 34.71 back on 7/6/2009, so I need to reconsider my long position in USO and start to position for the downside. This is consistent with the seasonal high for Oil and this time of year (late July) followed by a seasonal low in Febuary 2010.

For the formula for range bands, check out my Blog Archive for January 2009.

Positions Update

7/26/2009 7:49:00 AM

I'm doing my Options Express account positions first this week since i'm firing on all cylinders in that account.

CQNHM/CQNHN - This is the CERN August 65-70 call spread I put on last week for a debit of $180 with max profit of $320. CERN had a good move this week and up volume has been swamping down volume as shown in the chart on the left. Earnings due out this Wednesday 11/29 after the close.

RFYHN/RFYHT - This is the RIMM August 70-75 call spread that I put on for a debit of $218 with a max profit of $282. This position has been working out well, but as I found out last week, I don't get to make the max profit (even though the stock is above 75) until much closer to expiration due to the extra premium present in 75 short call.

Now back to E*Trade....

C - This stock is a looser, but for some reason, I feel compelled to hold onto it.

DIA - Long 1 lot in my retirement account. The broad indices are clearly under-represented in my account.

MFE - This is a recent winner picked up from my weekly scan of the IBD 100. I'm up about 2 points on this since entry and earnings are due out during market hours this Thursday. I may put on the 45 collar (long 45-put, short 45 call) if I can do so for a credit heading into earnings.

MYRX - Stock had a pretty-decent week up 7%. This is a zero-cost basis leftover from the MYGN debacle.

NEOG - Earnings came out this past week, revenues rose 14% versus the same quarter last year. Gross margins almost 50%. CEO says.. "We continue to see a world of opportunity ahead for us, and we will continue to execute the growth strategies necessary to seize the opportunities." Sticking with it.

QCOM - This stock got a double-whammy of bad news this week. First earnings came out below expectations and second, South Korea hit QCOM with a 200 million plus fine for anti-competitive practices. With all that, the stock only sold off 2% from its recovery high. But you can't keep a good stock down, and QCOM is a long-term winner.

SXCI - Stock made a new recovery high this week. IBD says "10% extended past 26.99 buy pt from pullback to 10-wk." No news this week, earnings due 8/7/2009.

USO - broke the 200-day moving average to the upside this past week as shown on the left. Seasonal tendencies are for it to peak in the next week or so, so i'm staying long and looking for a topping pattern to hedge my long.

YUM - Picked up another lot in my retirement account this week as YUM appears to be bumping along the bottom of a channel.

CD Listing

Taxable

FEDERAL TR BK FSB SANFORD FLA 5.40% 08/11/2009

FIRST MERCHANTS BK N A MUNCIE IND 5.30% 7/20/2009

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

LEHMAN BROS FSB WILMINGTON DEL 5.10% 09/08/2009

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

WASHINGTON MT BK HENDERSON NEV 5.15% 07/31/2009

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

1ST COMM BK NORTH LAS VEGAS 5.15% 08/28/2009

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

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

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

Weekly Update - 7/24/2009

7/25/2009 10:42:00 PM

Overall 79% cash and equivalents and 21% stocks. The broader market pushed higher this week defying the bears and my high cash position.

So for now i'm seriously under-performing the SP-500 on the year. But all is not lost since I still have the majority of my capital and my sanity. In trading and in life, when things are working for you, you keep doing those things. When things are not working, you do less of those things.

In trading terms, that means when you are loosing money, the answer is to get small and trade smaller amounts until you regain your technique. Once the technique has been re-validated, you can scale up and add size to get back to where you need to be. For me that means keep the large part of the portfolio in high-yielding CD's and use the remaining poistion to take smarter, smaller and more concentrated positions using options and small equity positions.

Along those lines, on Tuesday I took all they were offering of "GMAC Automotive Bk Midvale Utah C/D FDIC INS to Limits 5.60% 07/21/2010". I'm now fully-loaded in CD's and have still have about 25% free cash in each account available for investing and trading. As you can see from my CD listing on my positions update, all my CD's yield over 5%. So don't settle for CD's paying less than 5%. Just keep the size to under 250K and you will be 100% FDIC insured.

My only other trades for the week were as follows. On Thursday I bailed out of all of my HMSY seeing some weakness in the chart. Note on the chart on the left how volume has been trailing off and was highter on Thursday's down day than it was in the prior 2 weeks. I'm anticipating a top building here and expect I can get in at a lower price going forward. Earnings are due out before the open this coming Friday and i'm expecting this to run up ahead of earnings and sell off like everything else has done lately. Also, I had a profit in all legs of this position and wanted to take it. I've seen plenty of winners become loosers this year and didnt want to let it happen yet again.

The other trade was adding 1 lot of YUM at 34 in my retirement account. YUM has been bouncing along the bottom of the channel and despite the high volume in the sell-off after earnings, I like the company and its prospects going forward.

More to come in the positions update.

Positions Update

7/19/2009 9:35:00 AM

USO/UBOGL - USO found a bottom at about 32 this past week and started to work its way higher. UBOGL (July 28 call) went out worthless which netted $120 per account. Seasonal trend is for oil to head lower as of end of July and make a low in Feb 2010. For now will be content to stay long as an inflation hedge and sell calls on a rally to collect premium.

QAQGO/QAQSL - These are the Apollo 65 put 75 call combo that I bought as part of an Iron Condor in APOL which went out worthless on Friday. I already netted $420 by closing out the short legs of this trade. I lost $250 on these 2 legs, so I netted $170 total. Could have made $300 had I let this trade run to completion.

YUM - Earnings came out and did not dissapoint. Did nothing on the options side. Noticed however that at one point on Tuesday, I could have sold the July 36 call and bought the July 36 put for zero cost. Had I put on this trade, I could have netted $240 per contract and still kept my stock. Something to keep in mind for future earnings releases when stock rallies into the earnings announcement.

SXCI - IBD says "Up 6% from 26.99 buy point from pullback to 10-week line." Earnings due out August 7 and IBD indicates "Analyst expect 4% drop in EPS after strong accelerating trend." Need to be vigilant for a potential top coming up into earnings. Volume on up days has been crushing volume on down days lately, so we are good for the time being. Added some this past week at 28.20.

RFYHN/RFYHT - RIMM August 75-70 call spread entered for a debit of $2.18. If RIMM has a close above 75 this week, the position should reach max profitability. Unclear on whether this will occur whenever RIMM closes above 75 or only on expiration. Will learn from this position.

QCOM - Earnings due out this Wednesday after the close and stock has rallied nicely at a new high since the 2008 top. At this point, the 46 or 47 collar can be entered for a credit. Unlikely to do anything this week since i'll be away on vacation.

NEOG - Stock seems to have found some resistance at 30 here. Earning due before the open on Tuesday. No options are available here and i'm unlikely to do anything going into earnings.

MYRX - Zero-cost mustard seed left over from Myriad Genetics debacle.

MFE - Stock is at a new 10-year high and looking like a winner. For the second week running, IBD has a black-square around this chart indicating its still in a good buying position. Long 1 lot in each account and sticking with it. Earnings due out on July 30 during market hours.

One distribution day in MFE on Thursday on higher volume.

HMSY - Up nicely on this position. Earnings due out on July 31 before market open.

C - Earnings came out this week. Citi is still a sick pup and managed to show a profit only because of a large one-time gain by the Smith Barney / Morgan Stanley joint venture. It had a good rally off the lows and considering it was $2.60 last week, it had a decent rally off the low.

CQNHM/CQNHN - This is the Cerner August 65-70 call spread. I paid $160 for this and it doesn't look too promising.

CD Listing

Taxable

FEDERAL TR BK FSB SANFORD FLA 5.40% 08/11/2009

FIRST MERCHANTS BK N A MUNCIE IND 5.30% 7/20/2009

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

LEHMAN BROS FSB WILMINGTON DEL 5.10% 09/08/2009

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

WASHINGTON MT BK HENDERSON NEV 5.15% 07/31/2009

Retirement

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

1ST COMM BK NORTH LAS VEGAS 5.15% 08/28/2009

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

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

Have a great week.

Weekly Update - 7/17/2009

7/18/2009 5:01:00 PM

Overall 77% Cash and CDs and 23% stocks. Stocks position up slightly due to addition of more SXCI. Also added some call spreads in RIMM and CERN.

Some of my favorite stocks had good up moves this week including QCOM, SXCI, HMSY, NEOG and MFE. More in the positions summary, for now the week in review.

I kept my promise to go CD shopping and on Tuesday bought a large chunk of "RG PREMIER BK P R HATO REY C/D FDIC INS TO LIMITS 5.45% 07/30/2009" for my retirement account. On Wednesday, I bought a sizable chunk of "WASHINGTON MUT BK FA STOCKTON CA CD FDIC INSURED TO LIMITS 5.05% 11/02/2009" for my taxable account.

On Wednesday, I also picked up another lot of SXCI in both my retirement and taxable accounts. The stock recently broke above the resistance area at 27. Checking the chart of up the left, volume up on days has been swamping volume on the down days, and the stock wants to revisit its old high at 31.95. Also, on Friday SXCI announced a 3 year deal to provide PBM services for the state of Ohio. More on SXCI when we get to the positions summary.

Thursday came along and took all they were offering of "GMAC AUTOMOTIVE BK MIDVALE UTAH C/D FDIC INS TO LIMITS 5.40% 06/21/2010" by purchasing equal lots in each account.

My old friend RIMM broke the range bands to the upside on Wednesday. Having been burned by the stock so many times this year, I bought the 70-75 call spread for a debit of 2.18. Max gain is $280 on a close above 75, max loss is $218 plus commissions.

I made a simlar trade in CERN. After entering CERN 2 weeks back and getting stopped out on the IBD 7% down rule last week, CERN came roaring back. I picked up the 65-70 call spread for $1.60. On a close above $70 max gain is $338, with max is the $160 debit paid to enter the trade.

I did the 2 call spreads in my (newly re-funded) Options Express account. Recall from 2 weeks ago took my APOL condor trade to E*Trade because OX wanted almost $60 for a 4-leg option trade! Well I called the guys at Options Express and told them I was going to take my business over to Think or Swim. I didn't hear anything back from them until a few days later when they told me they would reduce my commissions to $1.95 a contract or $10 per leg, whichever was greater. After the 2 trades, I realized they charged me $12.95 for a 2-leg trade which is better than they promisied and equal to E*Trade! Bottom line - if your broker's commissions aren't good enough - call them up they will drop them for you!

In the meantime I went ahead and opened a Think or Swim account. Their platform is amazing and a bit intimidating. In fact, after navigating around it for a while, I appreciated the Options Express web-based platform. I seem to be able to find my way around there more easily.

Think or Swim is still pretty cool. They have this "My-Trade" feature where you can see what their other users are doing and/or recommending. Its a constant stream of new Option Trading ideas. You can put the trades on using their "Paper Money" application to see how they work out. Options are an amazing investment vehicle and I think i'm somewhere between beginner and intermediate. I used the Paper Money feature to put on 2 trades:

Short 100 shares both FAS and FAS. Idea being they are chronic loosers and both underperform due to the costs inherent in portfolio construction. When one is +2.85%, the other is -3.0%. Should be interesting to see how this works out.

Second was a Calendar Spread in AAPL. Bought 1 October 140 call and sold the August 140 call. I don't fully understand the implications of calendars, so this trade should be a good education experience.

Enjoy your weekend.

RIMM Breakout

7/16/2009 3:26:00 PM

RIMM broke the daily range bands to the upside early today. Looking at the chart of the left, you can see that range bands have crushed buy and hold in the past 2 years.

Having been burned by this stock several times already this year - this time I bought the August 70-75 call spread for a debit of $2.18. Max gain is $282, max loss is $218 not counting commissions.

Positions review

7/12/2009 8:03:00 AM

Doing positions in reverse order this week.

USO/UBOGL - Check out the way the 12-bar range bands trading system have completely crushed buy-and-hold when trading USO. I took the sell signal back on 6/22 to take off half of my USO position. I protected the other half by selling a July 38 call for $1.20 which will go out worthless. So at this point, i'm down about $400 on the USO, but will make some money on the short call.

I owe you all a post with a range bands manifesto. I've been doing some work with Backscanner and have some interesting results to report. More on that later today if I have time

QAQGO/QAQSL - These are the Apollo 65 put 75 call combo that I bought as part of an Iron Condor in APOL. I already netted $420 by closing out the short legs of this trade, so now i'm content to hold these until this Friday's expiration. With only 0.05 and 0.18 left its not worth the commisson to close these out anyway.

YUM - Earning are due out after the close on Tuesday. With my cost in the low 29's, i'm up about $1000 on this position. Now I can either a) Sell stock and take profit b) Sell 35 call against position c) Buy protective put, d) Collar the gains by selling call and buying put or e) Do nothing.

I took and look and here's what I came up with. Sell the July 34 calls at 1.40 and buy the July 35 Put at 1.0. This positions costs me a credit of 0.4 and i'm covered from 1x1 from 34 south. If the stock rallies, I sell at 34 and I can live with that. If the stock sells off I can close the long puts for a profit, the short call expires worthless and I get to keep the stock.

SXCI - Stock made a new all-time closing high on Thursday. Stock is extended way beyond 50 and 200 day moving averages and is vulnerabily to a decline. But making a new high is an important technical event and cannot be ignored. Besides, there are no options on this stock, so its either sell or stick with it. Several analysts raised targets, one as high as 29. This stock is an add-to on a decline. IBD agrees: "In possible buy range after visit to 10-week line.

QCOM - Stock has been flat to down 8 of the last 10 days and down volume is exceeding up volume. Even so, its oversold short terms and may find support at the 50-day MA.

NEOG - Stock is taking a rest after a recent run. I've been with this company since 2007 and up about 30% on the position.

MYRX - A leftover from the MYGN debacle, mustard seed with zero cost basis.

MFE - IBD has a black square around this which means the they its in buying range. Their comment: "Cleared buy point at 40.99 then eaed under it. Next few days will be telling.

HMSY - IBD says "Climbed 10% after clearing 38.8 buy point, dips in Soft Trade"

C - This is a stinky loosing position down 27%, don't know why i'm sticking with this position and it needs to be cut.

In the interest of self-awareness, I decided to list out my CD's also:

Taxable

FEDERAL TR BK FSB SANFORD FLA 5.40% 08/11/2009

FIRST MERCHANTS BK N A MUNCIE IND 5.30% 7/20/2009

LEHMAN BROS FSB WILMINGTON DEL 5.10% 09/08/2009

WASHINGTON MT BK HENDERSON NEV 5.15% 07/31/2009

Retirement

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

1^ST COMM BK NORTH LAS VEGAS 5.15% 08/28/2009

WASHINGTON MU BK HENDERSON NEV 4.05% 07/17/2009

I need to do some serious CD shopping this week. As I said in my weekly update, if you go out as far as 7/2010, you can get yields up to 5.6%

Weekly Update - 7/10/2009

7/11/2009 7:49:00 PM

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.

Positions Update

7/5/2009 8:08:15 AM

C - This is a loosing position and should be cut. There's not further technical or fundamental justification to hold on. Looking at what happened with the reverse split in AIG, this stock has much further down to go. Before I beat myself up too bad, think of how Prince Alaweed Bin Talal feels. He rode C all the way down and lost billions.

CERN - This stock broke out decisively last week to $64 and I added 100 in each account at about 62.25. I'm now in the hole about 2.5 points on this position.

FAS - With a cost at 11.25, i'm in hole on this position as well.

HMSY - Finally a winner with a recent pullback. Volume is declining into this pullback.

MFE - Added this position this past week on pullback after a breakout.Volume declining once again on the pullback.

MYRG - In the hole in the position as well and need to scale out on a rally.

MYRX - Recent spin-off from MYGN and the only silver lining in the MYGN debacle.

NEOG - Up nicely on this position

QCOM - Up nicely on this position, thinking about selling some 45 calls to take profits and exit

SXCI - Up nicely on this position

USO/UBOGL - Clearly rolling over now and now down slightly on my entry at 36.5. Short 38 call looks like it will expire worthless which is good for me.

YUM - Up nicely on this position, thinking about selling some 35 calls to take profits and exit

Weekly Update - 7/2/2009

7/3/2009 9:24:00 PM

Overall 27% stocks, 73% cash and equivalents. It was a brusing week and I took nasty losses on MYGN and AIG. It was a demoralizing set of losses and its taken me a day or 2 to recover enough emotionally to be able to write about it.

The week started with an Iron Condor position in APOL. I got this idea from CNBC's Options Action TV show. I sold the 65-60 put spread and the 70-75 call spread for a net credit of $3.0. The graph on the left shows P&L with break-even on a close at expiration between 62 and 74. I did this in my E*Trade account for about $22 commission instead of the $60 that Optionsxpress was asking for the same trade. OX was charging about $15 for each leg of the spread which would be almost $120 round trip!

APOL earnings came out strong after the close Monday and the stock rallied to the low 70's early Tuesday. I took the opportunity to buy back the $65 short put for a $250.0 profit. This was almost the entire potential profit on the position. By the end of the week, APOL pulled back and as of this writing the 70-75 call spread is about $30 in the money at the $60 put is $140 in the hole. With 2 weeks to go until expiration i'm looking for a close below $70 for the call spread to go out worthless. At that point, i'll take the $130 profit on the call spread leg and take the $150 loss on the $60 put and call it a successful trade.

Tuesday also brought a pullback in CERN so I bought 1 lot in each account at $62.25.

McAfee had a nice breakout on Monday on 2 times normal volume. I picked up 1 lot in each account at $41.95. Monday's rally also shook me out of my long position in SH which I closed in each account for about a $200 loss.

Wednesday brought AIG's 1-20 reverse split, so my 2000 shares in each account became 100 shares in each account just about $20 a share. From there the stock basically tanked and lost 10-15% of its value right away. Realizing that this stock could once again go to $1, I sold the position in both accounts for about a 30% loss in one account and a 40% loss in the other account. Fortunately, these were relatively small size positions dollar-wise, so the losses were reasonable in size.

MYGN is where the real damage was done this week. The stock tanked 10 points on Wednesday on a weakened full-year outlook. At that point, I was long 500 shares in the cash account and 400 shares in the retirement account. Thus I lost almost $9000 on this gap and hit me hard financially and emotionally. I sold half the position at 26.15 and the other half just a few ticks from the low at 25.70.

I could write a short-story about everything I did wrong here, so here's the executive summary:

- I continued to like the stock even though it dropped out of the IBD 100.

- I added to a loosing position (averaged down) after the first gap from $38 to $33 in an attempt to get back to even. It worked for a short time as the position went from (at one point) -$2000 to just above even.

- I stayed positive despite the fact that the daily range bands went negative back on 4/21 at $39 and the weekly range bands went negative back on 5/7/at $32.

- I missed the warning sell-off that came on 6/26 on a 7x volume surge

- I was distracted by the MYRX spin-off and didn't want to exit the position just prior to the spin-off of Myriad Pharmaceuticals.

To summarize, I let blind faith in the company distract me from all the warning signals I should have used to get out of the position.

The only bright side is that on Thursday, MYRX showed up in my account. The position is worth about $500 in each account with a zero cost basis. Perhaps a seed of value will grow out of that position.

Finally, on the retirement side, a fat CD came due and I got paid a nice lump of interest. Need to re-invest that cash. A quick scan of the CD space shows 3 month CD's in the 3.6% range. Will buy some next week on the retirement side.

Positions Update

6/28/2009 10:11:00 AM

AIG - has reduced its debt to the federal government from $173 billion to $127 billion. The company got approval from the Fed to retire another 25 billion in exchange for ownership of more insurance subsidiaries. Estimates in January put the entire value of AIG's holdings at $225 billion so when all is said and done there should be 100 billion worth of businesses here once the government is fully paid off. Its going to take some time. Shareholder meeting coming up Tuesday 6/30.

C - Nothing exciting happening here, just slowly rebuilding the business and cleaning house.

FAS - Showing some signs of life on Friday after recent weakness

HMSY - Stock quietly closed at a new all-time high on Friday on good volume. IBD indicates 100 technical summary: "Up 7% from 38.10 handle in base-on-base pattern. " This was is part of the Russell 3000 so the late day buying may be part of the annual rebalancing that took place on Friday's close. Either way, it has all the makings of a winner, part of IBD 100, new all time high, great earnings, great fundamental story. Okay enough already.

MYGN - This stocks is a roller-coaster and on Friday was down 2.90. Since i'm long 500 shares that's almost a $1500 hit in each account. Ouch! Waiting for the Myriad Pharma spin-off which is due to be paid on 6/30. Once that pays i'll consider taking some off the table.

MYRG - After a nasty sell-off back to below $19, my entire position went into the red. Then we had a good rally along with Friday's incredible volume after the close (see Weekly Update). I'm looking for a rally above $22 then i'm going to sell half my position.

NEOG - This stock has been on an incredible run and i'm expecting it to shortly take out its all-time high at $32.

QCOM - Another great stock which is going to be an add-to under $45.

SH - Last weeks long entry is under pressure as we approach end of quarter window dressing.

SXCI - Another great stock with a great pattern. Price at all time high and it hitting on all cylinders!

USO/USOGL - Oil is looking toppy here and i'm long 100 shares at 36.5 and short the July 38 call at 1.2.

YUM - IBD did a great article on this company in this week's Monday edition. Thinking about buying some stock and selling calls, but the $35 call is trading at 40 cents so its hardly worth it.

Weekly Update - 6/27/2009

6/27/2009 10:17:00 AM

Overall 30% stocks, 70% cash and equivalents. Stocks position up slightly since last week due to an entry in SH and and exit in USO.

Some very interesting activity in MYRG after the close on Friday. This stock has trade at most 500K shares per day. It was on pace Friday for an active day then after the close a single block of 1.1MM shares crossed the tape on a huge apparent "Market on Close" order. Then after that, another 2.55 MM shares or so crossed the tape, split pretty evenly between the bid and the offer. Someone is doing some massive accumulation or distribution in this stock. IBD shows 16.2 Million shares outstanding so about 3% of the float of this company traded after hours on no news. I read in IBD that there was some Russell funds rebalancing. I checked and could not find MYRG in any of the Russell 1000, 2000 or 3000.

USO crossed the lower range band to the downside on Monday. I took this an opportunity to take profits on the shares I bought back in early March in the low 29's. That turned out to be low point for the week as USO ground higher from there. I took the mid-week rally as a chance to sell some July 38 calls at 1.2 on the other half of my position. I'm expecting a seasonal high at at the end of July and having paid 36.5 a sale at 38 plus 1.2 points premium would be a decent outcome.

I'm feeling some pressure to take some profits as I am underperforming the S&P 500 in both accounts. As of Friday, S&P 500 is up 1.73% for the year. My retirement account is down 2.5% for the year and my taxable account is down almost 5% for the year. I have a fair amount of CD income in the pipeline which will help somewhat.

Here's my strategy for the rest of the year:

- Increase stocks position to closer to 50% as my CD's come due

- Scrub the IBD 100 each week and buy winning stocks with good chart patterns. This method has yielded some good winners such as HMSY, SXCI, MYGN and MYRG.

- Add to winners when they are working (think NEOG)

- Take larger and more concentrated positions on stocks displaying good price action.

Enjoy your weekend.

Long Entry - SH

6/23/2009 8:23:00 AM

The Proshares Short S&P 500 ETF broke the daily range bands to the upside yesterday. I picked up 1 lot in each account. Stop below the low of yesterday's bar at 65.15.

Positions Update

6/21/2009 7:45:00 AM

AIG - I received the notice for the upcoming shareholder meeting and they are planning a 1 for 20 reverse split, so my 2000 shares will become 100 and will price the stock at about $30. I'm not sure this is a good thing because the stock will just have farther to drop! Reuters research has this stock at "Outperform" based on valuation and I agree. Much as we all love to hate this company, there are many profitable businesses buried inside.

C - Dick Bove from Rochdale securities issued a "buy" with a price target of $12. That will be a hefty profit for me at some point in the future, now all I have to do is wait for it. As I pointed out back when I bought it, the government is taking all the downside and giving the upside to the shareholders.

FAS - Stock peeked above its rising 50-day moving average on Friday and is recovering from a recent sell-off. With entry in the low 11's i'm down on this position.

HMSY - was my big winner for the week and I already covered it in my weekly update. Stock had a convicing breakout on Tuesday, then had 2 inside days on lower (but still positive volume). Then it had another rollicking breakout on Friday and moved into new all-time high territory. New all-time high is one of my favorite self-fullfilling technical indicators because it tends to bring in the momentum players. This week's IBD still flags it as a buy because its only 4% extended from the buy point at 38.38. Stock has a history of pulling back after big moves, so while volume has been monster, a rest is clearly in order.

MYGN - Stock had a nasty 2 day sell-off earlier in the week on low volume, but nearly made it all back by the end of the week. Waiting for spin-off of Myraid Pharmaceuticals which will trade under ticket MYGX and is expected on 6/30/2009.

MYRG - Already covered in my weekly update. Looking to unload half my position above $22 and reload at under $21.

NEOG - Checkout the move this small-cap maker of food and animal safety product had on Friday. The stock broke out to a new high for the year on Friday on the largest volume seen since January. The only news I could find was 2 brokerages who cut the shares to "Neutral" from "Buy" this past week. The recent deal with the Chinese government is still being factored into the shares.

QCOM - Stock rebounded nicely on higher volume after a nasty sell-off on Monday and Tuesday. Looking to add more shares on weakness as this stock in a winner and likely headed higher. QCOM is a great way to play the "smartphone" wireless Internet story which is a great macro theme trumpeted by Jim Cramer of CNBC's Mad Money.

SXCI - No news this week. IBD-100 technical blurb: "Extended 14% from 22.60 buy point in short pattern". Fundamental blurb: "Earnings growth ranged from 41% to 138% the past 4 quarters."

USO - appears to be rolling over here. Seasonal high is expected at the end of July, so i'm expecting one more push higher before the high of the year. Time to start thinking about taking profits though.

YUM - No news this week except a bear fund has shorted it. Sticking with it.

Cut your losers and let your profits run, that's my mantra.

Weekly Update - 6/19/2009

6/20/2009 7:45:00 AM

Overall 30% stocks, 70% cash and equivalents. Stocks position down 3% from last week due to shakeout in RIMM. With the broader market rolling over, it was time to take some positions off the table and protect some recent gains.

With broader market weakness taking hold, I was no longer comfortable being long this 3X small cap bull fund. Also, I got the prospectus for this and the related family of Direxion 3X funds and all over the prospectus the stressed the fact that these funds track the daily performance of the fund, but deviate over time. In my case, I bought on 5/20 and sold on 6/15 for a small loss. Had I bought IWR (iShares Russell ETF), I would have made 2.6% instead over the same time period.

RIMM broke the daily range bands to the downside at $77.89 on Wednesday 6/17. Note how the range bands went positive back on 3/17 at about $41. So the range bands caught an incredible move here and gave a great exit signal as well!

Seeing the weakness, I sold my 100 shares in each account for a small profit on Monday 6/15. I held my June 80 calls to the bitter end, however and lost $6.90 in each account on this position. On the OptionsXpress side, I closed out the short side of my 85-90 call for a $205 profit. I let the 85 call expire worthless and took at $282 loss on this position total. That was $82 more than my planned maximum loss of $200, but I thought it was worth removing the $300 cap on profits in case the stock rallied after earnings. That turned out to be a bust as the stock sell-off telegraphed the disappointing earnings announcement.

RIMM and TNA were my only disappointments on the week and it was all positive otherwise.

Back to my new friend MYRG. After rallying as high as $23.19 during the week it sold off back down to $21. So it occurred to me that this is a good trading stock and that I could get in around $21 and out at about $22. So I sold the 200 shares purchased for $21.05 at $21.75 for a $140 profit in each account. Then I waited for a pullback and re-entered the same 200 shares at $21 in one account and $20.90 in the other.

On the technical side, the stock is forming a nice cup-with-handle pattern. The handle hasn't quite formed yet, but if it does, we could easily see a break up the $24.50 area. The plan for next week is to sell the additional 200 I bought in each account on a pop above $22 and let the other 200 ride. At this point, i'm long 400 shares in each account and up nicely on the first 200.

Next up is my new best friend HMSY. I entered this stock recently below $35 and it's had a nice move up from there. HMSY broke out decisively on Tuesday 6/16 with a move above the recent range. I posted on the blog and picked up 100 shares in each account at 39.25. On closer examination, I actually screwed up and bought 200 shares in my taxable account. Figuring my sub-concious new better. I picked up another 100 in my retirement account at 39. After moving sideways for 2 days, it broke decisively higher on Friday on nice volume. No fundamental news that I could find so this looks like just plain old accumulation.

That's it for now. I'm just going to keep playing my game - buying breakouts, cutting loosers and letting my profits run. See you in the positions update.

HMSY

6/16/2009 12:39:00 PM

HMSY is breaking out big time. No news that I could see. Picked up another 100 in each account at about 39.25 early this afternoon. Not sure what's going on, but could be a major player in the government's plans to create their own Health Care plan as a fallback to private insurance. This company checks to make sure individuals are not already covered by another plan before paying. IBD has a breakout buy at the 38.85 price point.

Positions review

6/13/2009 11:04:00 AM

AIG - Holding up fairly well since the daily range bands went negative back on 5/22/2009. Sticking with it since its basically a call option with no expiration. Overall i'm up in the taxable account and down slightly in the retirement account.

C - Not much is happening in this position since C got kicked out of the DJ-30. Down about 40 cents per share on this.

FAS - Holding up fairly well - down slightly on this position in each account.

MYGN had an excellent week. After the earnings sell-off, I was down almost $2000 in each account on this position, now up slightly. Additional entries at $34.50 and $35.75 got me up to 500 shares in each account. TSV has been leading price to the upside as TSV has made a new recovery high ahead of price. Note the spin-off of Myriad Pharmaceuticals is expected by the end of June with 1 share of the spin-off for every 4 shares of MYGN. So to keep things even, I should take profit on 100 shares of MYGN.

HMSY - Up nicely on this recent entry with cost just below $35. Will add-to on a dip below $35, no news this past week.

MYRG had an interesting week. After being up $500 in each account in just one week's time nearly all of my profit went away with Tuesday's sell-off. But the stock came roaring back Wednesday and make another new all-time high before backing off on Thursday and Friday. The only fly in the ointment now is volume which has been declining. Also, volume on Friday's sell-off is the largest day of down volume in weeks. No news this last week, so i'm considering this just profit-taking and sticking with it long term. May take off half however if it gets back to $22.

NEOG - Another great looking chart, wish I had room for them all! After last week's news about the deal with the Chinese government, its off and running. Next stop $30.

QCOM - Cooling along with the rest of the Nasdaq 100 and volume on down days has been steadily increasing. Showing a nice profit here with entry just below 40. The company increased its 3rd qurter guidance on Thursday and Friedman billings has a 12-month price target of $54.

RIMM - in a holding pattern ahead of earnings due out on Friday morning. Long 100 shares in each account plus one June 80 call. Up nicely on the stock, but slightly underwater on the calls. Looking to take profit on the stock and either rollup to a high strike call or buy a protective put. See the weekly update for more

SXCI - up nicely on this position with cost below $20. No real news since May 20th, no options, no news to report, sticking with it.

TNA - up nicely on this broad-market play with entry at $27.82.

USO - up nicely on this position with entries at $29.20 and $32.85. Sticking with it for now, letting profits run.

YUM found support right at the lower range band. Like the rest of the market, volume has been declining recently. Like I mentioned last week, the Kentucky Grilled chicken seems to be well-received and hopefully will give a boost to this tired KFC franchise. Up nicely on this position with cost just below $30.

Weekly Update - 6/12/2009

6/13/2009 9:58:00 AM

Overall 33% stocks, 67% cash and equivalents. Stocks position is down 12% from last week due to weakness in Apple which shook me out.

This rally is looking tired. Take a look at the TSV-price divergence on the left. The 28-bar TSV with a 10-bar moving average shows the rally of the last 10 sessions has not been supported by TSV. TSV is essentially price change times volume so a declining TSV can indicate lack of buying as much as outright selling. In this case, I think its just lack of buying. Price is the ultimate indicator however, and I would follow the price before following the TSV.

On the trading side, the rally in AAPL was loosing steam early in the week. Recall I bought 100 shares at about 140.50 in each account on the breakout above 140. I sold those shares in each account on Monday in the low 141's and took a small profit in each account. That left me long 2 June 100 calls purchased last week at 43.30 in each account last week. This position deteriorated as the week went on but seemed to hold above 140. On Friday, AAPL opened decisively below 140 and I sold the 2 contracts at 38 and 37.80 in each account. So I took about a $1060 hit in each account on this sale. So to answer last week's question - was this position smart or dumb - the answer was - dumb!

That loss was a bit demoralizing, but I have good profits in some other positions. The younger me would have taken a profit in another position to offset this loss. But i've learned over time to cut your losses and let your winners run. Take a look at my weekly update which has mostly winners since the losers have already been eliminated.

The real challenge for next week is how to handle RIMM earnings. I'm long 100 shares in each account from about $79.50 showing a decent profit in each account. I'm also long 1 June 80 call in each account which is about 80 bucks underwater. Here's what i'm considering - on a rally back to $85 dollars, sell the long stock and take a $5.5 profit. Then take that profit and buy 1 80 put at about $3.00. So this is essentially a long straddle where I can take all the profit above say $87, but i'm covered 1 for 1 below 80.

The chart on the left (courtesy of our friends over at OptionsXpress) show the profit/loss graph for this position. If i'm able to sell the long stock for a $5.5 profit, then I will be profitable between $75 and $85 with the maximum possible loss at about $300 in each account if the stock settles right at $80.

If you read my entry on RIMM from mid-week, recall I am also long 1 $85-90 call spread with a maximum $200 loss at $300 profit.

RIMM

6/11/2009 1:50:00 PM

RIMM is looking pretty breakout-ish. I'm already long some stock and 80 calls. Earning are out next Thursday and the stock has been working its way back towards last years breakdown price at $120 and the all-time high of $150.

This week I funded my OptionsExpress account which had been sitting idle since last years bludgeoning. So today bought 1 lot of the 85-90 call spread for $2. On a move to $90 I make $300 or a 150% profit. On a close below 85, I loose $200.0. How's that for loss control?

Also - check out the shot of the live streaming chart on the left side courtesy of https://www.freestockcharts.com. I just found out today that the Worden's are behind FreeStockCharts, although they have been pretty secretive about it up to now. They probably didn't want to canniblize their TeleChart business. What an awesome tool, totally free.

Positions Review

6/7/2009 8:37:00 AM

AAPL / RFYFP - Long 100 in each account as well as 2 June 100 calls. Stock continues to move up amid the developers conference coming up next week. Also, got a high-profile analyst upgrade last week.

Need to be careful with my APPL calls, because I got burned back in Feb when I let a good solid profit slip away due to simple lack of exit plan. I'm going to put in a limit order to sell one of the 2 at 50 and let the other one ride.

AIG - Moving sideways, nothing much going on technically. Slowly selling off assets to try and pay back the government.

C - CNBC is calling Citi a "Zombie Bank". Its starting to look like a Zombie investment as well as the daily range bands are about to go negative and the price bumps up against the top tthe declining weekly range band.

FAS - Similar pattern to AIG and C, nothing much happening. Perhaps financials have had their run.

HMSY - I'm up on this position after a recent entry at 34.90. IBD 100 quick recap says "Still reaching for possible buy point in cup with high handle. Sticking with it for now.

MYGN - Seems to have found some resistance at 38 after a nice run up from the low. Getting ready to spin off 1 share of Myriad Pharmeceuticals for each share held. Record date 6/17 pay date 6/30.

MYRG - This stock had quite a run and i'm up nicely on this IBD-100 pick. On June 6th Deutsche securities started coverage with a buy rating and a price target of $27.

NEOG - Stock cleared recent resistance at 24 on news from 6/2 that NEOG is parterning with the Chinese government. The Scotland-based office of NEOG will develop food and animal safety tests that will be replicate across 30 sites in China. This is an awesome development for this small-cap animal and food safety play.

RIMM / RFYFP - Now long 100 shares in each account plus a June 80 call. In the money nicely on the stock and coming into the money on the calls.

SXCI - This position is working out well and is firing on all cylinders and i'm up nicely.

TNA - Up nicely on this small position.

USO - Oil rally continues, expecting a seasonal high at the end July.

YUM - Based on my own family's experience, the Kentucky Grilled Chicken is a hit. My wife would never allow the fried variety into the house due the sky-high carb content and its corresponding impact on my daughter's diabetes. The grilled variety is essentially carb-free and the kids love it.

Weekly Update - 6/5/2009

6/6/2009 9:29:00 PM

Overall 45% stocks and 55% cash and equivalents. Mr Market continued to rally and I was pulled in on a number of breaks and add-to situations. Overall, I feel i'm hitting my stride and I enjoy this type of market since its breakouts galore!

Starting with my last post, I bought 100 shares of MYRG in each account early Monday at about 19.55. It quickly moved up and I picked up another 100 in each account at 20 even. Next up was my old friend Apple computer which broke out decisively on Tuesday and I bought 100 shares in each account on at 140.50. Also on Tuesday, RIMM started to breakout and recall from last week's post that I was long 200 shares in each account just under 80. On Tuesday, RIMM got above 83 and I reconsidered by short 80 call. So I bought back the short 80 call and turned around and bought 1 RIMM June 80 call (RFYFP) in each account just under 7.0. That did it for Tuesday.

Wednesday's weakness challenged some of my confidence, so I sold 100 shares of RIMM in each account at about 80 and took a small profit on half of my long stock position. I also sold 100 shares of MYGN in each account and took a small profit on that position as well.

On Thursday, AAPL broke out decisively and I wanted to add more stock but I was nearly out of cash due to a large CD position that I had added earlier in the year. So I levered up and instead bought 2 AAPL June 100 calls at 43.50 in each account. So instead of laying out $28,000 in each account for 200 shares, i'm now long nearly the equivalent of 200 shares in each account for about $8700. Smart or dumb? We'll see!

On Friday, we broke out across the board and all of my recent buys worked out well. Also, many of my existing positions had good moves which i'll review in my Positions Review post.

Cheers and enjoy.

MYRG

5/31/2009 8:49:00 AM

Picked this one up from my weekly scan of the IBD-100. Stock has composite rating of 92 making in the top 90% percentile in terms of earnings and price momentum. Stock is at a new all-time high and up volume has been WAY up on the up days. This stock is a screaming buy. Looking to start small, say 100 shares and see how it goes.

Positons review

5/31/2009 7:25:00 AM

AIG - Stock is above rising 50-day PMA, but below 200 day declining PMA. No news this week.

C - Similar situation as AIG in terms of of the technicals. Recent resistance is at $4.5 and the stock seems to be stuck in the recent range.

FAS - Financials seem to be cooling recently as attention starts to focus on other areas of the market. FAS seems to have found support at its 50 day PMA and is slowly rising. Bear in mind FAS was in the 25 range at the beginning of this year, so considerable upside remains.

HMSY - New position this week, HMS had a nice orderly pullback from a recent high. Already covered in my Weekly Update entry.

MYGN - Added to this position this week, looking for higher prices ahead.

NEOG - Coverage initiated with a buy recommendation this past week at Sidoti. Never heard of these guys.

QCOM - Stock has recovered nicely from a recent selloff where it found support right at the intersection of the 50 day PMA (red) and 200-day (cyan) PMA.

RIMM - Now long 200 shares and short 1 June 80 call. This stock could easily sell off sharply so back to 75. Watch the price action, it will be telling.

SXCI - This stock finally had the breakout i've been looking for an i'm up nicely. As IBD put it this weekend: "At a two-year high after clearing short cup-with-handle base." Sticking with it.

TNA - Bought this for some general market exposure at $27.60. It quickly sold off but has since recovered. This stock was at 35 at the start of this year so considerable upside remains.

USO - Almost back in the money on my orginal entry, and up nicely on my second entry at $29.20. Expect further upside action through the end of July which is typically the seasonal high.

YUM - Sunday night is Taco Bell night at my house. Go YUM. Go Taco Bell! Enjoy your weekend.

Weekly Update - 5/29/2009

5/30/2009 8:33:00 PM

Overall 33% stocks and 67% cash and equivalents. Stocks position up 10% this week due to new long entries. Mister Market continued to push to the upside this week and I had no choice but to follow the money.

First up is HMS Systems (HMSY) which was highlighted in last Monday's Investor's Business Daily "Stocks in the News" column. I know this stock from years past and its a great health-care cost-containment play. It recently broke out to a new all-time high at $38, then pulled back. Note that the stock is above a rising 50-day (red) and 200-day(cyan) PMA. No news this past week. I bought 100 shares in each account at about $34.90.

Next up is my old friend RIMM - Research in Motion. The stock has been on a major tear lately, and I picked up 100 shares in each account at about 79.50 on Wednesday. Owing to the major possibility that I top-ticked this trade, I sold 1 June 80 call in each account for $4.50. On a close above $80, this trade will rake in $500 per account in a few weeks time.

Next up is MYGN. Stock is quietly builing a base after a recent earnings related sell-off. On Friday it pierced the flat 200-day moving average on above average volume. In fact, volume was the highest since earnings bombshell back on 5/5. There was no news this week, but I noticed that call volume in the June 35 and 40 calls has been steady with risking open interest. Someone is clearly accumlating this stock in expectation of higher prices ahead. Going into Friday, I was long 400-shares, 200 from my initial entry pre-split at 41, and another 200 shares at $34.50. I added another 100 shares at $35.90 to make it an even 500 shares. I expect MYGN is headed back to the $40 level.

Sure enough, RIMM broke out on Friday and got as high as 80.97 before pulling back. I picked up another 100 in each account at about $79.50 on the way down.

Positions Review

5/25/2009 7:41:00 AM

AIG - Sitting right at the lower range band, almost unchanged from last Friday. Forming the right side of a Head and Shoulders bottom.

C - New FDIC special fees, new stock offerings, no shortage of headwinds for Citi. But i'm sticking with it on the belief that the worst is behind them.

FAS - Underwater on this position as the rally in financials seems to be fading. Looks I was late to arrive to this party and i'm may well be late in leaving also. An offsetting position in FAZ might be the remedy, but i've been burned on that side as well.

MYGN - As I mentioned in my weekly update, I bought another 200 shares in each account this past Wednesday in anticipation of a break above the upper range band. Stock was punished recently after earnings were announced when it didn't meet expectations. But the fundamentals are intact and this is a solid company. Even recent legal action by the ACLU to sue the company to release its proprietary information on breast cancer genes couldn't bring any more sellers.

So in the absence of any real news, the stock is just drifting sideways. Stock goes positive on a close above the upper range band at 34.31. Note that the stock is currently negative on the break below the lower range band at 37.93 back on 4/22/2009.

NEOG - A steady 10% earnings grower. Sea-sawing downward from a recent all-time high at about 31.50. Down almost 30% from the top.

QCOM - Missed the chance to see May and June 45 calls. Stock now drifting lower and the only thing that concerns me is that volume on down days has recently exceeded volume on up days. One really interesting thing I have noticed however is that options for QCOM now trade at $1 strike increments. So there's a June $40 call, June $41 call, you get the picture. Many more buy-write opportunties that way vs MYGN for example which still trades in $5 increments only.

SXCI - Fundamentals and technicals are now lining up and we are expecting higher prices ahead. Daily range bands also went positive back on 5/7/2009. Weekly review of IBD 100 indicated SXC got a multi-year, multi-million dollar contact with Prime Therepeutics. Also indicates forming right side of base with a possible buy point at $23.53.

TNA - Took a small position in TNA early this week at $27.80. Top-ticked this positon and i'm down over $4 already.

USO - Finally came into the money on this position with entries at $36.50 and $29.20. Sticking with it into the summer driving season.

YUM - Up nicely on this position and sticking with it. Tried out the new Kentucky Grilled Chicken this week. It was pretty good and not a bad zero-carb menu choice for those of us with diabetics in the family.

Enjoy the rest of your memorial day weekend.

Weekly Update - 5/22/2009

5/23/2009 7:08:00 AM

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.

Positions Review

5/17/2009 5:38:00 PM

AIG - Cooling off after some recent strength. Daily bands go negative at 1.55. I'm long 2000 shares and will consider selling calls on half if we can make our way back around the $2 area. No real news this week other than an S&P downgrade.

C - Citi sold some 2 billion in 10-year debt at 8.75% without a goverment guarantee this week and the sale was well received. Its going to take a while for this company to become profitable but i'm sticking with it.

FAS - taking some lumps on this position having recently entered in the low 11's. Daily range bands went negative on Wednesday of this last week. If this stock just gets back to where it was on 1/2009, it would be at $25, so FAS is clearly lagging the general market strength. Is going to take some patience, but I think the financials are have much more room to the upside than the downside here. Some covered calls could ease the pain

MYGN - After last week's drubbing, the stock seems to have found a bottom and is moving sideways up. Wednesday after the close a story came out about how the ACLU is suing Myriad over its patents on BRCA1 and BRCA2 hereditary breast cancer genes. The stock was actually up slightly the next day indicating the sellers are done for now. Long term earnings are still growing in the 30%-40% range so i'm sticking with it.

NEOG - Daily range bands went negative Wednesday. Don't care and sticking with it.

QCOM - Daily range bands went negative, sticking with it. No real news this week.

SXCI - Last weeks earning were good, sticking with it. No news this week.

USO - Already covered in my other post. Looking to take profits in late July.

YUM - Daily bands went negative, weekly bands still positive, sticking with it.

Anybody notice gas prices going up?

5/17/2009 11:14:00 AM

Take a look at a 12-month price chart of Gasoline versus Crude Oil courtesy of gasbuddy.com:

Crude bottomed out at $32 back in late December and is now up almost 75% from the bottom now at $56 a barrell. Gasoline bottomed out at $1.60 at about the same time and has since move up only about 43% to a $2.30. So it looks like crude prices exceed gasoline prices on both the way up and the way down.

I've been playing the USO ETF which is up only about 39% off the bottom or roughly have of crude oil. So it appears the USO has been significantly underperforming crude itself.

Using the magic of stockfinder, I did a comparison between USO and a bunch of other energy ETF's which is shown on the left. Turns out that most energy ETF's underperformed USO except for DTO (double short oil ETF) and OIH, the Oil Service Holders.

The best performer versus USO was DTO, the double short ETF and the worst performer versus USO was the DXO, double long ETF! How ironic is that?

Key takeaways from this comparison: OIH is a better way to play energy an energy bull market than USO. Stay away from all the other energy ETF's and stick with OIH on the long side. The dividend paying power of the underlying stocks is no doubt a contributor to the outperformance.

On the short side, DTO looks like a great way to play an energy bear market. Seasonally. expect to see a top in energy prices at the end of July, and that would be the time to switch from OIH back to DTO.

Also better to fill up the gas tank (and Heating Oil if you need that) now because we are looking at higher prices for the next 2 months anyway.

Weekly Update - 5/16/2009

5/16/2009 4:01:00 PM

Overall 81% cash and equivalents, 19% stocks. Mr Market took a break from its recent run and started to resume some more normal behavior. We had 4 down days this week and one up day, and the one up day (Thursday) didn't even take out the prior day's high.

From the bigger picture perspective, daily and weekly range bands on the SPX are still both positive, but the daily bars are looking like they are going to go negative in a day or 2. SPX goes negative on a close below 86.70.

For the moving averages, SPY is above its rising 50-day MA, but below its declining 200-day MA. Its almost like the 200 day MA was a ceiling that we couldn't make our way over. So the long term picture is still negative which is just fine with me since i'm pretty heavily in cash.

I also noticed some of my favorite stocks (YUM, QCOM) went negative on the daily range bands, so it might be time to resume one of my favorite down-to-sideways market tactics, selling covered calls against stock positions.

Energy has had quite a run this year which deserves its own post.

Positions Review

5/9/2009 6:07:00 PM

YUM - Retail is the #1 sector in Investors Business Daily this week and YUM has a 96 composite rating. That mean's overall, its in the 96th percentile among all stocks in the list. Plus, you can't beat the 99 cent crunchy beef tacos at Taco Bell. Weekly and daily range bands both positive, staying long and resisting the urge to sell the 35 calls.

USO - has had an great run lately and and the weekly range bands just went positive. Note how the range bands caught the sell signal at 92 back on 8/8/2008! Here's a case where the range bands absolutely crushed buy and hold. Buy and hold at 50 cents on the dollar while range bands at $1.75 on the dollar! I'm in the money on my entry at 29.20 and coming up on my earlier entry at 36.50. Finally close to even on this position and expect oil to continue to rally into the summer driving season

SXCI - Will hold off until after I reveiw the earnings call.

QCOM - No news this week. Both daily and weekly range bands are now positive. Nasdaq has outperformed the broader market for the year and is now taking a break.

NEOG - Daily range bands are now positive and weekly bands are about to go positive. The swine flu outbreak has died down incredibly fast, so the money is coming out of related plays.

MYGN - Stock has taken a beating and daily and weekly range bands have both turned negative. Stocks is now about 30% down from the high at 45 and went from a nice gain to a nasy loss with my cost basis at about 41. Revenues grew at 42% in the most recent quarter, but revenue fell short of expectations at 87.5MM versus 90.MM. Historically, this stock has had 30% to 50% pullbacks just to rally higher eventually. Next earnings in August, sticking with it for now.

FAS - Entered this position this prior week. If this stock gets back to where it was on 1/1/2009, this could easily double from here. I have a relatively small position, so i'm sticking with it.

C - Entered this position this prior week. Similar situation to FAS, could easily double from here.

AIG - Listening to the earnings call and the company is working on repairing this broken company.

Weekly Update - 5/8/2009

5/9/2009 8:53:00 AM

Overall 80% cash and equivalents, 20% stocks. Stocks position up 3% this week due to new entries in the financials. The market powered decisively higher this week and went positive for the year leaving me with an large cash position and underperforming.

After having sold Citigroup in mid-April, the stock found support at the $3 level and moved decisively higher. Wednesday was a breakout day with the stress test news so I bought 1000 in each account at about $3.80. There was a similar situation in AIG, so I bought another 1000 on the retirement side. So now i'm long 2000 AIG on both the taxable and retirement side. Haven't listened to AIG's earnings call yet.

FAS had a similar move, so I bought 200 in each account on Wednesday at $11.17. This is perhaps 1/5 of a full-sized positon, but given the volatility of this stock, I thought it best not to enter all at once. Its amazing to think that my initial position in FAS taken at 3.88 back in March. Had I just held that position (instead of selling it for a 30% gain) I would be looking at a +400% gain. What can I say, fear and greed.

At this point, the public and the hedge funds are chasing this market higher, afraid to be left in the dust. Its a good time to return to my trend-following mantra and watch the range bands. I read an excellent book on the subject called "Trend Following" my Michael W Covel. In this book the author showed years of statistics about how simple trend following produces excellent long terms result without any regard to the fundamentals. In other words, turn off the TV, stop reading the newspaper and just follow the trend!

Psychologically, its very difficult to do. I recall James Altucher of thestreet.com talking about one of the great trend-followers John Henry - owner of the Boston Red Sox. Henry ran his trend-following model for over a year and showed a -4% loss. But he kept on following the signals and the system ended up making many years of excellent results. Humans are wired much more for short-term results. 100 million of years of evolution that rewarded hunting, gathering and scrapping for that next meal is hard to undo.

Positions Review

5/3/2009 9:16:00 PM

YUM - Last week's run-up took us up to the $35 level where resistance was found. The CEO David Novak excercised a bunch of options and sold a large number of shares in the low $34 range. That aisde, this company is still the fastest growing retail business on the planet and is a major grower in China. This is a long-term hold so resisting the temptation to sell May 35 calls here.

USO - Oil had a good rally this week and USO has once again turned up and it looking to challenge its recent high at 32. Longer term, this trade is going to work as inflation returns and the dollar tanks. Both of these items are going to take some time to appear, so again patience is key.

SXCI - Stock has recovered from the recent selloff and bounced off support at the 17.75 level. News indicates a major holder may liquitate since their lockup period expired May 1. At one point, I had a good profit on this stock, but having sat through a few corrections already, i'm sticking with it. Earnings due May 7.

QCOM - Recent settlement with BRCM indicates company has to pay almost 900 million to Broadcom over a 4 year period. That means a 200 million dollar payment this quarter. Ouch!

NEOG - This company is involved in animal feed safety and would seem to benefit (at least psychologically) from swine flu.

MYGN - Stock has dropped off the IBD 100, but i'm sticking with it for now. Stop is now on a close below 37.

DIA - Broke the weekly range bands to the upside this past week for the first time in ove a year.

AIG - Not much happening here, some asset sales are coming up and will hopefully get this stock going.

Weekly Update - 5/1/2009

5/3/2009 8:16:00 AM

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.

Positions review

4/26/2009 5:15:00 PM

YUM - Reported better than expected earnings on Thursday and the stock popped to values not seen since October 2008. At this point it looks a bit overbought so I may consider taking some profits this week.

One amazing thing about YUM was that they opened 100 new restaurants in China in the quarter and are laying the groundwork for some solid future growth.

USO - Daily range bands went negative on Monday. Weekly range bands are still negative. Sticking with it based on re-inflation trade.

SXCI - Stock looking toppy but uptrend intact. Earnings coming up Thursday May 7th.

QCOM - Earning were due Friday, but they deferred their earning calls unil Monday due to a pending announcement regarding a potential settlement with Broadcom. Looks like a positive depending on what the settlement will cost.

NEOG - Upgrend remains intact, no news this week.

MYGN - This stock is problematic. I went from a nice profit and now i'm looking at a -7.40 loss. The stock was dropped from the IBD-100 with no mention whatsoever. It also broke the 50-day MA and is still above the rising 200-day MA. Earnings are due May 5.

AIG - Chart is still positive on the daily range bands, weekly range bands go positive at 2.02.

Weekly Update - 4/24/2009

4/26/2009 8:18:00 AM

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.

Positions review

4/19/2009 8:42:00 AM

YUM - Rallied almost 30% off its lows set back in December of 2008. Coming up against resistance at 33.5. Earnings due out after the close on Wednesday. Estimates 0.41 | 0.399 | 0.36 (High | Mean | Low)

USO - Still positive on the daily range bands, weekly still hasn't gone positive. Sticking with this long term on the basis that oil is at historically cheap levels

SXCI - Uptrend is intact, but short term weakness in evidence. Volume has increased on down days this past week.

SSO - trend remains up. Daily range band goes negative at 20.05. On the weekly side, SSO hasn't gone positive yet, but will do so on a close above 24.

QCOM - Daily and weekly bands both positive. Earnings due out after hours on Wednesday April 22. Estimates: 0.44 | 0.411 | 0.39 (High, Mean, Low).

NEOG - This has been a steady 10% per year earnings grower in the past 5 years. Price is about 30% off the high, while earnings and revenue continue to make new highs. Cash flow has been decelerating however. Chart looks constructive.

MYGN - Cash flow, Earnings, and Revenue all making new highs. This stocks is highlighted by IBD to be in a good buying position.

FAS - Daily bands remain positive and turn negative at 5.98.

C - Listened to the earnings call today and his company is bafflingly complex. Daily band remain positive and go negative at 2.91. Additional equity offering due which will further dilute shares. Still many good businesses here that can be spun off, like Banamex for example.

AIG - Working its way back up to resistance at 2.0. Also good businesses hiding in here under the 300 Billion of bad Credit Default Swaps which taxpayers are currently financing contribuing to Goldman's recent earnings.

Weekly Update - 4/17/2009

4/19/2009 8:17:00 AM

Overall 21% stocks, 79% cash and equivalents. Stocks position down slightly from past week due to some long side liquidation. Overall, I was up about 0.6% for the week versus a similar move in S&P based on Thursday’s numbers. That aside, everything I did this week turned out badly.

Noticing a breakout in RIMM on the weekly chart, and weekly range bands, I bought 2 lots of RIMM in the taxable account and 1 in the retirement account at about 64.80 on Monday. RIMM of course petered out after I bought and went sideways down from there. I sold 1 lot at 63.5 a day later for a $130 loss.

I attended Dr Alex Elder’s Webinar advice Tuesday evening where he was bearish on RIMM. RIMM started to look toppy, so I shorted 100 RIMM at 63.75 and sold my other long at 63.38. I also closed my other lot in the retirement account at 63.40. At this point I’m short 1 lot of RIMM and I’m feeling good as RIMM is starting to turn down after its big run. Next downside target is $60 and i’m already counting my future profits.

On Thursday, RIMM opened strong and started to rally and I ended up covering my RIMM short on Thursday at 65.5 for a 1.75 loss. So on RIMM alone, I lost about 4.2 on the long side and 1.5 on the short side. These weren’t large losses, but at one point, I was up over $100 on each of these positions and let them run to losses.

FAS started to look toppy in the middle of the week. I had a good profit from a long entry at 5.75 so I sold 2 of my 5 lots in each account at about 8.60 on Tuesday. By Wednesday, these had dropped to the high 7.0’s, so I felt good. At the same time, I bought 1 lot of FAZ in each account at about 10.25. These ran up to about 11.8 on Wednesday and I was up nicely. Well FAS rallied back and FAZ dropped and I ended up closing my 1 lot of FAS in each account on Thursday at about 9.15 for a $110 loss in each account.

So the bottom line was I lost about $850 across the 2 accounts based on these trades before commissions.

Finally, I sold my AAPL April 115 calls at 3.30 on Wednesday at the low of the week. I made a small profit on these, but only a fraction of what I could have closed them out for later in the week.

In retrospect, I was in the right positions and in the right direction, but I didn't have clear entry/exit parameters and the account suffered as a result. Also, i'm in the mindset to take small losses, and let profits run. Its just that I took the losses but didn't let the profits run in some cases. In the bright side, I didn’t do much damage to my accounts and I still have some good positions open.

My regular corporate job was incredibly demanding this week along with some last minute scrambling to get tax return in also took away from market time. I know I could have pulled some money out this option expiration, but it wasn't mean to be.

For the year. I am down about -2% versus -4% on the SP-500 based on Thursday numbers.

Beware the Black Swan

4/12/2009 9:45:00 PM

Having been captive on a cruise ship this past week, I was fortunate to find the book “The Black Swan – The Impact of the Highly Improbable” in the ship’s library. The author (Nassim Nicholas Taleb) rails against applying the normal or "Gaussian" distribution to the real world.

Instead, Taleb focuses on the “Black Swan”, a sudden, unexpected, game-changing event that was not predicted in advance yet regardless has a huge impact on future events. The origin of the term is that bird scientists considered all swans to be white until they found the first Black Swan. Examples of Black Swans are 9/11, the collapse of LTCM and the success of Google.

Social scientists and portfolio managers have for years based their planning assumptions on the curve to the left which assumes that "2-Sigma" or 2 Standard Deviation events occur less than 5% of the time. Instead these seeming rare events occur much more often and instead blindside their unexpecting victims with devestating affects. Graph on the left is from Wikipedia at http://en.wikipedia.org/wiki/Standard_deviation

Consider a turkey living on a farm. After having been fed for 1000+ days, the Turkey has every reason to beleive he will continue to be fed regularly by his human keepers. Then one he misses a meal then Chop! Happy Thanksgiving! Madoff anyone?

Rather than prove case statistically, Taleb points out these deficits in human perception:

- We focus on what we know and neglect what we do not know. You've read the books in your library, but how big is your anti-library (books you have not read)?

- Once we have an opinion, we tend to avoid data that doesn't match our conclusions and instead focus on data that meets our expectations. Social scientents call this "Confirmation Bias".

- We ignore the vast audience of "silent evidence" such as failed companies, Hedge Funds, money managers etc. We model our assumptions instead on the statistics of the survivors. This bias tends to ignore the investments that failed completely and thus underestimates your chances of a failed investment.

Much of this book went over my head, but I did get his much. Taleb's message is "Dont be a sucker." But don't sweat the small stuff either. Life as we know it is so incredibly improbable.

As magician Shawn Farqhuar said on the ship (and I'm sure he didn't coin it). "Yesterday is history, tomorrow is a mystery and today is a gift. That's why the call it the present."

Positions Review

4/12/2009 10:15:00 AM

QAADC – AAPL April 115 Calls – Up almost 200% on this position but April expiration is coming up fast.

I’m looking for a quick move up to 130 to close these out for about $15. Not sure if I’ll get it since 120 is pretty strong resistance. Earnings are due out the week after expiration so we may see a run up ahead of earnings. May take profit on the April 115’s and roll up to the May 130’s.

YUM – The up channel remains intact and no resistance on the chart until 32.50.

USO – Range bands went long at 26.56 back on 3/4/2009 and have stayed long since. Sticking with this as a re-inflation trade

SXCI – This IBD-100 pick is looking good – no real resistance until $30

SSO – Nice breakaway gap on Thursday, first resistance is at $25, then $30.

QCOM – Another breakaway gap, no real resistance until 44. Earnings due Wednesday after the close.

NEOG – Daily chart in a nice uptrend – food and animal safety

MYGN – Stock quietly closed at an 8-year high and making a run at the new all-time high set back in the year 2000 at 60.

FAS – Off to the races based on WFC news, no real resistance until 12.

DIA – Long 100 shares in my retirement account all along that I have been neglecting in my posts.

C – Range bands entry at 2.5 and still looking good. Earnings due before the open on Friday.

AIG – This is my only looser in the portfolio right now, sticking with it on a break-up or spin-off scenario.

Weekly Update – 4/10/2009

4/12/2009 9:54:00 AM

Overall 22% stocks, 78% cash and equivalents. Stocks position up about 1.2% due not to new positions, but instead to gains in the portfolio fueled by breakaway gaps across the board. I was captive on a cruise ship this past week which was just as well since it kept my hands away from the keyboard and allowed profits to run.

FAS was my big winner of the week. The range bands went positive back on 3/17 and have stayed long since. FAS had a 40% move on Thursday alone and with resistance at 7.50 cleared, there’s no real resistance on the upside until about 11.70.

So while the economy and jobs picture remains bleak, easy monteary conditions from the Fed seem to be working their magic. I did some scans on the flight back from LA, and found a large number of upside breakouts. I scanned for purple bars (which indicates the breakout from the upside range bands) and found these stats:

DJ-30 – 8 breakouts among the 30 industrials

DJ-20 – 11 breakouts among the 20 transports

DJ-15 – 3 breakouts among the 15 utilities

SP-500 – 167 breakouts among the SP 500

This market is still behaving as if its going higher and there's still enough doubt out there (and cash on the sidelines) to keep the rally going. I'm a living example with almost 80% in cash!

I'm going to watch early next week for clues as to market character. For new longside entries, put the stop just below the recent lows set on Thursday.

As of Thursday’s close, I’m down about -2.3% for the year versus -5.17% for the S&P 500.

What this says is that is a pretty broad-based rally. Of the 3 major Dow groups, the Transports seem to be the strongest with over half of the constituents breaking out on Thursday.

Positions review

4/3/2009 9:47:00 PM

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.

Weekly Update - 3/27/2009

4/3/2009 9:41:00 PM

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.

Positions review

3/28/2009 7:01:00 AM

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

Weekly Update - 3/27/2009

3/28/2009 6:53:00 AM

Overall 18% stocks and 82% cash and equivalents. Stocks position close to unchanged from last week since some of my longs got called away due to options expiration. This was offset by new position in MYGN.

This past few week's rally had me a big un-nerved in that the market went from -25% to -10% in about 3 weeks time without me on board. Sure, I missed the 20% down, but I also missed the +15% up since the bottom. By Thursday, I was twitching and nearly bought some SSO at 21.50, but fortunately, I held off. By Friday, the market turned back down, and I breathed a sigh of relief that the downtrend had re-asserted itself.

The week's winner was MYGN. I bought one lot in each account at 82 on Tuesday AM and posted to my blog. After getting as high as 82.60 on Tuesday, MYGN closed down a little over 81. On Tuesday, some big news came out regarding published recommendation by the American College of Obstetricians and Gynecologists recommending that doctors routinely evaluate whether a patient is at risk of carrying a genetic mutation of the BRCA1 or BRCA2 gene which is a marker for breast cancer. MYGN is the one and only company selling the detection kit. This and the coming 2 for 1 split was enough to rally the stock big. By Thursday, the stock was over 93 on a split adjusted basis before closing at bit over 44 (or 88 split adjusted for the week).

MYGN aside, I didn't do any other trades this week and that was fine. I've been over-trading lately without the results to justify the added activity. So to go a whole week and make only 1 trade - which was a winner - felt good.

Overall down about -4% for the year versus -%8 for the S&P based on Thursday numbers.

MYGN

3/24/2009 12:54:00 PM

I'm back into my old friend MYGN.

Its had a pretty orderly pullback from a recent high and is currently forming a pennant formation. Recall that the stock will break either side of the pennant before the flag lines converge.

I believe this is due to split 2 for 1 tomorrow.

I bought 1 lot for each account this morning at 82.

Positions Review

3/21/2009 7:07:00 AM

AIG – Added this week. Much uncertainty ahead but downside is limited due to already low stock price and small position size in the portfolio.

C – Much farther along in the recovery process than AIG. Price action held up well with Friday’s selloff. I don’t like the prospect of a reverse stock split, because that would just make further room for downside in the stock. We’ll see.

FAS – In the hole on this position and looking for a bounce-back rally next week

NEOG – Earnings came in a hair short of expectations due to “de-stocking” by distributors and some weakness due to currency translations. Overall though pretty solid performance.

QCOM – Had a great rally in the past 2 weeks, but unfortunately, I was called away at 35 in my taxable account and left with 100 shares in my retirement account. Waiting for a drop back below 35 to reload.

SXCI – Added to the S&P/TSX composite index on Friday, should add some index fund buying.

USO – Patience is starting to pay off. With the sell-off in the dollar, oil prices are on the rise and I’m sticking with it. Seasonally we are looking at a rally into the summer driving season.

YUM – Restaurant group has been looking weak and YUM is not immune to further downside. Sticking with it.

Weekly Update - 3/20/2009

3/21/2009 6:50:00 AM

Overall 18% stocks, 72% in cash and equivalents. Last week’s rally in the financials had some carryover into this week.

On Monday I picked up 500 FAS at 5.70 and again at 5.89 as it broke out. That rally sold off sharply. I closed 500 FAS for a .70 point loss on 500 shares. Feeling that I top-ticked this position, I bought 200 FAZ at 41.63 as a hedge against this position.

I closed the 200 FAZ the next day at 42 for a small profit. The financials bounced back. And soon the other half of my FAS was back in the black.

Also on Monday I saw Citigroup breaking out. So I picked up 1000 in each account at about 2.44. This is a case of 1 x 4 payoff ratio. It’s a case of 2 points down, 8 points up with C meeting these criteria.

Logic as follows:

The government is not letting them go under
The government is has already “ring-fenced” bad assets of almost 300 billion
The bad assets will get worked off via Citi-holdings.

So it seems like the government is taking all the downside and leaving all the upside to the shareholders which includes the US government which has a 30% stake.

Also picked up some CD’s in the retirement account on Wednesday – WAMU paying 4.0% and 4.05% yields due in early July.

Late in the day Wednesday, the financials rally started to fade so I decided to pick some more FAZ to offset my exposure in FAS and C. So I bought 200 FAZ and 41 looking for a quick bounce to 43 to unload. Instead, the financials rallied hard and FAZ tanked. By the time I got out, it was just under 37 so I lost $800 in about 2 hour’s time! Dumb!

On Wednesday, I saw a similar situation to C unfolding with AIG, so I bought 1000 AIG in each account at about 1.3. AIG stayed around 1.3 for the rest of the day.

Thursday came along and I was king for a day – or a short time in the morning anyway! C rocketed as high as $3.7 and AIG rocketed to $2. I had big wins with both positions on paper and I was feeling good. That rally slowly fell apart and by the end of the day C had fallen back to 2.7 and AIG 1.6. Seeing the perfect Fibonacci pullback to 1.65 from 2.0, I picked up another 1000 in my taxable account at 1.65.

By Friday, my conviction was tested on Friday as AIG closed the week at 1.26 and C closed the week at 2.62. I’m sticking with them because, while it could take a while, value will be realized. The government will find a way to get the bad assets off the books because they are large shareholders themselves.

Friday was options expiry, I got called in both accounts for the 1000 FAS bought at 3.2 for a $700 gain in each account plus $400 premium received for the 4.0 short calls. I gained about 35% on this position in 2 weeks. Also sold QCOM at $35 and collected call premium on that position as well.

As of Thursday my performance is about down -5% for the year versus minus -13% in the S&P 500.

Where does all this bailout money come from?

3/19/2009 8:58:00 AM

Hi all. Before you get too outraged about all these government bailouts, its interesting to get an education on the Federal Reserve, Treasury, etc, etc. The News Hour on PBS did an excellent overview take a look:

http://www.pbs.org/newshour/bb/business/jan-june09/solman_03-17.html

The bottom line is the Fed can create billions in assets electronically with the press of a button. The Federal Reserve is not the same as the Treasury which actually has to fund the government. In the past 12 months the Federal Reserve has injected over 1 trillion into the banking system and they are going to now insert money into Treasury with their plans to buy government debt.

Its kind of perverse that the Fed can create money out of nothing to buy government debt to finance the government's over-spending. Talk about a giant ponzi scheme!

The net result of too many dollars in the system is a decline in the dollar and hyper-inflation. We saw the dollar start to crack yesterday with more declines to come. Gold also had a huge rally as a result. Dr cthruu did a post on the dollar breakdown yesterday as well as the gold breakout.

If you don't have any hard assets in your portfolio, get some. I consider real estate to be a hard asset.

Let me know any comments and good trading all.

Positions review

3/14/2009 8:17:00 AM

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.

Weekly Update - 3/13/2009

3/14/2009 6:43:00 AM

Overall 14% stocks, 86% in cash and equivalents. I had a decent week which was welcome after recent action. Having washed out last week the last of my longs, it was time for a bounce!

Watching Fast Money over the weekend, Dr J Najarian recommended FAS the 3X Bull Financial fund. He raised the prospect that a change in mark-to-market accounting might take the pressure off the financials and make them appear at once to be incredibly undervalued. I’ve been watching this TV show almost 2 years and this is the first time I followed a recommendation and actually made money!

On Monday I picked up 1000 FAS in each account at 2.90. For the rest of the day it went sideways down.

On Tuesday FAS took off as expected and I picked up another 1000 in each account on at about 3.20. At the time, the March 4.0 calls were selling at .40. That looked like free money, so I wrote 10 contracts in each account on the second 1000. If called, this would be a 34% gain in less than 2 weeks time.

I also picked up 200 SSO in each account on Tuesday in the low 15’s. Thanks to Dr Cthruu for this pick. Dr - give me some feedback if you read this and let us all know as your FAS, SSO and TNA trades are playing out.

I also picked up another 100 USO on both sides in the low 29’s. Saw a story that oil is cheaper now on an inflation adjusted basis than it was 20 years ago. Higher oil prices ahead but, it’s going to take some time.

By Wednesday, the rally started to peter out, so I took the first 1000 FAS off the table at about 3.90. This was a nice gain in a short period of time. In retrospect, though, I took it off the table way too soon because FAS continued to rally later in the week. This was a 35% gain in 2 days time, so wasn't about to let this slip away,

I also closed my SSO on Wednesday at 16.25 for a small gain.

The market continued to rally as the week went on and some of my other positions gained, but not as much as the overall market. I think I was properly bullish, but took gains off the table too soon. I could have pulled twice as much from this move had I been more patient.

I think I could benefit from more contact with other traders. It’s one of the downsides to trading (and working) in isolation at home. Give me some feedback if anyone has any success with online interactive trading communities.

Portfolio picked up about between 1.5 and 2 percentage points on the week. This is Thursday's data returns the taxable side are understated because it doesn't include the bank account.

Watch for falling yields!

3/10/2009 6:54:00 AM

Taking a look at my monthly E*Trade bank statement, I see that they quietly lower their yield 3 times in February. Late last year, they were paying 3.5%. When I put the money in in early January, it was yielding

3.0%. Here is is less than 2 months later, and they have dropped it over a full percent or 100 basis points. Now that the Fed has cut rates basically to zero, these guys and every other interest-bearing instrument have to follow rates down. This is ultimately good news for stocks as lower yields on fixed income securities eventually push money back into stocks. As Marty Zwieg says "Dont fight the fed!".

In terms of how to fight back, a quick CD search shows a Wamu bank with an 4% yield. That's pretty good and since its FDIC insured, I don't see any more risk than the other CD's paying in the 1% range. All I can say is they must have higher yielding obligations on their books and they are desparate to fund those even at 4%. If anybody has any indication that this CD has an more risk than one from another bank yielding 1%, please give some feedback.

In Sheila Bair we trust!

Positions review

3/7/2009 6:42:00 AM

NEOG – Just took out the 2008 low at 19.10 and I’m now underwater on the stock. Still out-performing the SP-500 over the past few years.

QCOM – Holding up very nicely in this environment, sticking with it.

SXCI – reported good earnings on Thursday and price targets raised to $24-$27 by several analysts. Stock broke out briefly on the news then fell back. I’m sticking with it.

USO is holding onto recent gains and looking constructive. Peter Worden did a positive piece on it last evening. 12-bar range bands have gone positive. Sticking with it and may add bullish April options position this week.

YUM – Has broken down and looks to be challenging the low at $21.50. I’m taking a beating but staying with it since I like the company and the business.

Weekly Update - 3/6/2009

3/7/2009 5:59:00 AM

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.

So at this point i'm down roughly -6% for the year versus about 24% in the SP-500. Losses in the taxable acount are overstated because it doesn't include the E*Trade bank account. The only positive I can find is that I have avoided further losses. Examples - sold LLL at $73 and its now at $58. Sold CSX at 29, now at $21, ETN at $45.50 now at $31 and the list goes on. I can imagine the pasting that mutual fund and managed fund holders - who have to be fully invested by definintion - are taking in this environment. And to add insult to injury - they are paying management fees!

ADP

3/5/2009 8:17:00 PM

Here's a look at Automatic Data Processing, the venerable business services company co-founded by NJ Senator Frank Lautenberg. ADP is a very well-run company with a broad and diverse range of businesses.

Price action has out performed the SP-500 (blue line). SP-500 is now down to 1996 levels while ADP still hasn't taken out the early 2003 low. That said, its still being drawn down into the morass engulfing the economy. Next support point for the stock price is the 2003 low of 24-28 bucks.

Once the 2003 low falls, the next stop is is the 1996-resistance in the 18 area. Once that level is breached, the 1993-1994 resistance in the 12 area is the next support level.

I'm not avocating any new positions here, but long term holders might want to take something off the table. Also, a collar (short call+long put) might be a low-cost way to protect against any further downside in the stock.

ZSL - Ultrashort Silver

3/3/2009 9:54:00 AM

Picked up one lot of ZSL - Ultrashort Silver ETF. I think the metals are a bit over-owned at this point and both Silver and Gold are due to take a break. Paid about 12.90 this morning with a tight stop at about 11.85.

I think it could get back up to 16, so that's 3 points up and 1 point down. Stop is below the low of the signal bar at 11.85. The closeness of the stop means its more likely to get hit than one farther away at the lower range band.

Note that ZSL is in a downtrend, so i'm looking for a trend reversal here.

Positions Review

2/28/2009 7:14:00 AM

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.

USO - Showing some promise as oil prices firmed this week. Can't give up the feeling that somehow USO is wagging the tail of the oil futures market.

YUM - Cut my position in half and looking to exit the other half on any type of rally. It broke down badly this week.

GEWOF - Long March 10 Puts. Already up 78%, sticking with it.

No new positions this week.

Take care, stay liquid, and drink plenty of liquids.

Weekly Update - 2/27/2009

2/28/2009 6:28:00 AM

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.

New Positions

2/21/2009 5:48:00 AM

On Thursday I picked up 2 GE March 10 Puts for $1 each. At the time, the stock was at about 10.20.

Like the risk/reward ratio - 1 point down, and if the stock gets to $6 that becomes $4 up. Friday the stock was down almost a point and i'm up nicely already. This trade is more in the SecurityGuy mold. Hey SecurityGuy - if you read this, give me some feedback on this trade.

Going to Trader's expo in NYC today, so may be seeing you at the Worden booth.

Positions review

2/21/2009 5:39:00 AM

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.

Weekly Update - 02/20/2009

2/21/2009 5:12:00 AM

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.

I took a look and as of Thursday I’m down about -4% for the year which is not bad compared to almost -14% for the SP500.

I don't think losses are acceptable in any timeframe. But this enviroment is clearly not friendly to long-side equity investors.

So for now i'm going to retreat to cash and look for trades with good risk/reward ratios - see new positions.

Take care and stay liquid.

Lookout below

2/18/2009 10:24:00 AM

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.

Positions Review

2/14/2009 6:10:00 AM

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:

AAOBG – Short 1 QCOM Feb 35 call against ½ position

GSQBO – Short 1 MYGN Feb 75 call against entire position

LLLBP – Short 1 LLL Feb 80 call against ½ position

RFYBJ – Short 1 RIMM Feb 50 call against stock bought at 47

RFYBK – Short 2 RIMM Feb 55 calls against stock bought at 52

YUMBF – Short 2 YUM Feb 30 calls

Weekly Update - 2/13/2009

2/14/2009 5:48:00 AM

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!

RIMM

2/9/2009 9:48:00 AM

My breakout antennae are twitching overtime on RIMM. Once it clears 60, 65 and 70 are easy targets, particularly since we are close to Feb option expiration.

I picked up another 2 lots in each account just south of 60.

Positions Review

2/7/2009 7:46:00 AM

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:

AAOBG – Short 1 QCOM Feb 35 call against ½ position

GSQBO – Short 1 MYGN Feb 75 call against entire position

LLLBP – Short 1 LLL Feb 80 call against ½ position

RFYBJ – Short 1 RIMM Feb 50 call against stock bought at 47

RFYBK – Short 2 RIMM Feb 55 calls against stock bought at 52

YUMBF – Short 2 YUM Feb 30 calls against 2/3's of position.

New Positions

2/7/2009 7:33:00 AM

I didn’t do much for new positions this week since waiting for February options expiration and for my short calls to come in.

SXCI broke out as expected, and I added one lot in each account at 20.5 on Thursday. No options on this stock so I’m a straight buy and holder.

On Friday, RIMM broke out to a recent high. Tired of this stock going up without me onboard, I bought 1 lot in the taxable account at 59.20 and another in the 401K rollover account at 59 even. Resisting the urge to sell calls this time because I think we are going to see higher levels ahead. That said, I would welcome a pullback since i'm short both Feb 50 and Feb 55 calls against stock bought below the strike.

I got my hands on a Blackberry Bold this week, and while not as cool as the iPhone, its freaking awesome and unlike the iPhone, its welcome in corporate America.

Weekly Update - 2/6/2009

2/7/2009 6:29:00 AM

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.

Positions Review

1/31/2009 6:01:00 AM

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

AAOBG – Short 1 QCOM Feb 35 call

GSQBO – Short 1 MYGN Feb 75 call

LLLBP – Short 1 LLL Feb 80 call

RFYBJ – Short 1 RIMM Feb 50 call

RFYBK - Short 2 RIMM Feb 55 call

YUMBF – Short 2 YUM Feb 30 calls

New Positions

1/31/2009 5:58:00 AM

Monday 1/23, YUM had been pulling back and I considering adding more. On the way down it paused at 28.5 and I nearly picked some up there. I waited it out and it got as low as 27.6 then rallied back convincingly. Impressed with the bounce back, I picked up one lot in each account at 28.5.

Tuesday YUM opened higher and I took the opportunity to sell 2 Feb calls at 1.2. I had a limit order in for 1.5 and probably could have gotten it on Wednesday had I been more patient. In either case, if YUM closes above 30 I get 1.5 points in the stock plus 1.2 points premium for 2.7 per account.

On Thursday, QCOM earnings were a disappointment, and I got finally got my chance to reload 1 lot in each account at 34 even. Not long after, I sold 2 Feb 35 calls at 1.2. On a close above 35, I’ll get 1 point it the stock plus 1.2 points premium for 2.2 points per account.

MYGN showed up on my weekly review of the IBD 100. Admittedly, I don’t know a lot about this company and earnings are due next week. Normally I wouldn’t touch this with a 10-foot pole. But the Feb 75 calls were trading at 4 and I got lured in by that fat premium.

So I picked up one lot of MYGN in each account at 74.3. It pulled back to the high 73’s, then rallied hard up to almost 75.3. On the way back up, my limit order got filled and I sold 1 Feb 75 call in each account at 4 even. If called, that’s a 6% profit in 21 days!

MYGN has the look of a stock that's going to 100. Plus the Obama administration is going to be much friendlier to biotechs.

Earnings are due out Tuesday, so there’s event risk. Option chains show downside risk to 70 and upside to 80.

Weekly Update 1/30/2009

1/31/2009 5:47:00 AM

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.