rovo's Market Journal -- 2011

[ModE98]

There is good reason to go for "growth and income" stocks that yield, say a low dividend return, but grow at a reasonable annual rate and increase the divi a bit each year. Nothing wrong with solid companies that will prosper as the economy improves, especially those with a world-wide market for their products. At our age, imho, just no longer believe straight growth, no divi, fit the bill.

Will continue my plan to diversify into those who pay 4% (min) yield as I ween myself off the remaining China ADRs over the next year, perhaps two (depending on the performance of those that remain). Too much risk, Rovo has advised to be very careful for good reason (gov policy, potential corporate mis-steps, etc. Had a bad experience with most of mine this year, and hoping for a come-back in the cotton-pickin' things this year to take some profits and run for the door.

[rovo]

2010 is now in the books and I have entered a new year in my spreadsheet. I'm all set up and ready to go come Monday.

The portfolio in 2010 finished a tad low for the year with a final gain of 29.55% against the goal of 30%. This was a decent year and I handily beat all the averages while still having a significant portion of the account in cash.

December finished at +4.13% for the month. Again, I'll take it.

[rovo]

Goal for 2011 is rather simple ..... end the year with a net gain of 10%. Net meaning in spite of living expenses and large withdrawal for taxes.

[rovo]

The more I look at the charts for the indexes, the more concerned I become about the markets being at a local high and beginning to roll over. Individual stocks may do well in spite of the overall market but generally they are all pulled down somewhat by a general market retrenchment.

Check out the charts for QQQQ, SPY, & DIA to see what I am referring to as far as a local high. Upward movement could continue but it will need something to cause it. In the meantime I see us drifting lower. New buying starting on Monday can delay the decline but I feel quite strongly we will see a correction within the month of January, most likely beginning at the end of this coming week or next week.

I have positions for the longer term and the short term and I will most likely lighten up on the shorter term positions at the first opportunity.

[rovo]

One of my largest and potentially most volatile holdings is Ford (F). As such, I keep a very close eye on what is happening with it. They announced a minor recall last week but unfortunately the wire services combined it with a Chrysler recall and I think this is why the stock dipped a tad on Wednesday. Other than this item things look darn good going forward. Early next week, 04 January, there will be reports of the sales figures, by manufacturer, for the month of December. Below are a couple of items on the expectations for these numbers.


DETROIT (Reuters) -- December is expected to be the third straight month that U.S. auto sales hold above 12 million vehicles on an annualized basis, capping a year of gradual recovery for the auto sector, analysts said.

While December alone cannot predict 2011 performance, a full calendar quarter of sales at this pace suggests the recovery could kick into higher gear.

"That's a long way from the 16 million and 17 million sales rates that we experienced for the better part of this decade. But we're coming out of 2010 on an upswing and I think this bodes well for 2011," said Ford Motor Co. sales analyst George Pipas.

TrueCar.com forecast a General Motors Co. December sales gain of 1.9 percent and a 6.3 percent jump for Ford, compared with December 2009 levels.

Read more: www.autonews.com/apps/pbcs.dll/article?AID=/20101230/RETAIL01/312309990/1424#ixzz19pGAbDgS

[rovo]

It should be noted that the Bollinger Bands are getting very snug on Ford, indicating a breakout in the near future. I think the December sales results will be the impetus needed to cause Ford to breakout to the high side. I'm quite certain of this and would say it has about an 80% probability of happening. It is time for Ford to blow away the previous high of $17.42 in a convincing manor. Friday's close was $16.79.

I'll be looking through the near term options before the Monday open to see if there are any bargains at the $18 or $19 Call.

Disclosure: 30K shares. 400 contracts F Mar 19 2011 $20 Call. 100 contracts F Jan 21 2012 $30 Call.

[rovo]

Well that didn't take long. I placed an order for Monday to buy some options in Ford. Placed the order at a penny but the Bid/Ask is 0.03/0.04. I'll see what it looks like on Monday morning and adjust the price in the order. 500 contracts F Jan 22 2011 $19.0 Call.
I don't think Ford will get to $19 by 22 January but the option would double or triple if Ford starts moving upward with any good velocity.
This is a VERY HIGH RISK play but a very low dollar amount, most likely $2K.

[rovo]

It is looking like we are going to have a very strong opening for the first trading day of the year.

My holding in TQQQ is showing +$4.12 in premarket , Ford is showing +$0.17 or +1.00% , and TBT is +$0.61 or +1.65% . HI isn't doing squat.

I still think we will see a few strong days and then the beginning of a correction. New 401K will be hitting the market soon with a lot of it happening this week.

[rovo]

I picked up the Ford options this morning at $0.05. More than I wanted to pay but it may be profitable shortly.
Bought 500 contracts F Jan22 2011 $19 Call at $0.0577 including fees.
Currently they are for sale at $0.12. Time will tell. ;D

[rovo]

I almost screwed up. I had TQQQ for sale at $155 (currently $154.80) and bumped it up to $160.

[Bluerobin]

DI, I did about the same - about 9 % on my regular account and an easy 10% on the day trading one, without working it too much. Some dogs I held kept me from trading more on the day trading account. The regular account is invested primarily for dividends but could have done better with a mix of dividend and growth stocks. I kept pace. 2011 should be better.

[livinincali]

Looks like we got the beginning of the month rally. It's been playing out this way quite a bit lately. It's amazing what liquidity from the fed can force people to do with their money. I'm expecting a significant swift selloff it/when a correction materializes but there's no way to time it in this melt up.

[lovetobike]

My fertilizer stocks are taking off like I had hoped. POT is up 18%, MOS 12%, and AGU 15%.

[Value Buy]

Anyone think Citi is going anywhere this year?
With the Government selling out of the stock in early December, it has not moved anywhere up, or down, since then?
I do have a position in JPM, but not Citi.

[rovo]

It is hard to determine anything with short term charts but either the market is going to rest a bit (think horizontal) or pull back from some of today's gains. My best guess is a pullback. Nothing to get excited about unless you are trading in and out. I think I'm about to get out of the TQQQ trade and book some decent gains.

ETA: placed for sale at 157.00.

[rovo]

An alternative viewpoint is some retail customers will check on the market at lunch time and then start placing buy orders. I've seen this happen quite frequently. At least it is what I think happens but it is hard to prove. Pretty much the same thing as my historical comment about 10:30AM EST being about the low point of the morning and a good time to buy in.

[rovo]

I'm out of the TQQQ trade. Bought 1K shares at 149.51 on 30 Dec. Sold 1K at average price of 156.22. Net $6,712 or 4.49% in 3 days. I'll take it.

[livinincali]

Well looks like HI is performing as I expected it. Pulling back sharply from it's run to the 61.8 fib retracement and 200 day moving average. Now we get to see how in holds up at support around the 50 day moving average at 20.40.

TLT/TBT charts look a bit strange here and it's whipsaw city. I still favor a continued uptrend in the TLT to around 95.50-96.50 but the picture is pretty cloudy here.

F is trying to break out but still stuck below resistance around 17.50. This one is a bit of a mixed picture as well with odds favoring the breakout but no confirmation yet. These types of situations can end up quite badly for a trader. One of the worst scenarios is buying a failed breakout because they reverse quickly leaving you trapped.

[Value Buy]

Jan 3, 2011 15:18:33 GMT -5 livinincali said:

Well looks like HI is performing as I expected it. Pulling back sharply from it's run to the 61.8 fib retracement and 200 day moving average. Now we get to see how in holds up at support around the 50 day moving average at 20.40.

TLT/TBT charts look a bit strange here and it's whipsaw city. I still favor a continued uptrend in the TLT to around 95.50-96.50 but the picture is pretty cloudy here.

F is trying to break out but still stuck below resistance around 17.50. This one is a bit of a mixed picture as well with odds favoring the breakout but no confirmation yet. These types of situations can end up quite badly for a trader. One of the worst scenarios is buying a failed breakout because they reverse quickly leaving you trapped.

The problem with Ford right now, is all the major banks are upgrading GM. Many funds will not take, major large positions, in two major American car companies, so it is up to F to produce above expectation results to move the stock from this level.

[rovo]

So I finally got around to looking at what the port did today. I was playing around with trying to post tables on this message board tonight.

Overall the port gained 1.37% which doesn't appear to be as good as the indexes but I now have a cash position of 27%. I'm pleased with the day's result.

I'm not concerned about my position in Ford at this point. I'm confident it will do fine. I wasn't expecting Ford to move as much as it did today. Tomorrow is, IMO, the defining day. Sales numbers to be announced for Dec. The Ford shares are for the longer term. The Ford options are for the short term and we'll see what happens tomorrow.

HI is erratic but this is also a longer term play. Likewise TBT is jumping all over the place as interest rates bounce around. I'm not concerned with either issue at this point.

[rovo]

I'm sitting on the sidelines this morning as I can not determine a market direction for a short term play. I have an order in for SQQQ @ $20 but it is just a place-holder order. SQQQ is a -3X Qs and with the market trend being upward I'm more than a little hesitant to short the Qs.

Ford may well crack through the resistance at $17.42 this afternoon. It is currently sitting at the resistance point and I'm encouraged by today's action in Ford. It must be reiterated that I'm am an extremely optimistic person, so take what I say and discount it somewhat. LOL

[rovo]

Jan 3, 2011 15:18:33 GMT -5 livinincali said:

TLT/TBT charts look a bit strange here and it's whipsaw city. I still favor a continued uptrend in the TLT to around 95.50-96.50 but the picture is pretty cloudy here.

The above quote is from Cali. Just for the record, I am in the opposite camp on TLT/TBT and I feel TBT is going to be increasing thoughout this year. Not screaming upward but meandering with an upward trend.

[rovo]

I just purchased 700 shares of TQQQ at $153.80. I tried to change the price downward but it filled before I could change it. I just hate it when that happens. I think it will be a profitable day trade but I have to be quicker on the price changes.

[rovo]

The market seems to be falling apart today. It will be interesting to see if we encounter the "buy on the dip" as we have so many times before. I've been mentioning I expect a pullback in the general market but I wasn't expecting it till late Thursday or Friday.

Meanwhile, Ford has set a new 52 week high this morning and the sales data for Dec. is still not available. Go Ford.

geeze. No sooner did I type about Ford did it start to drop like a rock. grrr.

[Bluerobin]

Rovo, I always viewed 10:30 as the end of opening euphoria (or panic) hour.

[rovo]

Ford announced Dec. sales as I was typing the previous message. Lincoln and Mercury sales dow quite a bit.

FORD’S 2010 SALES UP 19 PERCENT – LARGEST INCREASE OF ANY FULL-LINE AUTOMAKER; FOUNDATION SET FOR GROWTH IN 2011•Ford's full-year sales totaled 1.935 million, up 19 percent versus a year ago – the largest increase of any full-line automaker
•Ford's December retail sales were up 17 percent versus a year ago; total sales of 190,976 were up 7 percent
•Ford's market share up for the second year in a row; first back-to-back increase since 1993
•Ford foundation set for continued growth in 2011 with its balanced line of high-quality, fuel-efficient products
•Ford provides 2011 global economic and industry sales outlook

media.ford.com/article_display.cfm?article_id=33704

[rovo]

For sure the market did NOT like the Ford sales release but I see it as being fine. Big decline in Mercury sales but this is a big "duh" since they are discontinuing the brand. I'm sure the market will straighten it out in a hour or so and the market is always correct. Expectations for next year's, 2011, sales are substantially higher than for 2010. It will be interesting to follow this puppy going into the new year.

[rovo]

Ford's Dec US Sales Jump 6.7%; Market Share Gains In 2010
12:24p ET January 4, 2011 (Dow Jones)
Ford's Dec US Sales Jump 6.7%; Market Share Gains In 2010

DOW JONES NEWSWIRES


Ford Motor Co. (F) posted a 6.7% increase in December U.S. vehicle sales, led by continued gains in truck sales.
The auto maker also reported its U.S. market share increased for the second year in a row, marking the first back-to-back increase since 1993. Ford's market share in 2010 was estimated at 16.4%.
The company, the only member of Detroit's Big Three auto makers that did not file for bankruptcy reorganization in 2009, has been outperforming peers the past two years, returning to No. 2 domestically behind General Motors Co. (GM) in the process.
Ford reported December sales of 190,976, compared with 179,017 a year earlier and 30% higher than in November. The larger Ford brand led the way with 9.6% growth, offsetting a 23% decline for Lincoln and an 11% drop for the soon-to-be phased-out Mercury.
Company-wide, truck sales climbed 13% and car sales increased 6%, while sport-utility vehicle sales were roughly flat. Retail sales, which climbed 17% from a year ago, were the highest for any month since August 2009.
December had 27 selling days, one fewer than last year.
Earlier Tuesday, GM reported U.S. sales climbed 7.5% in December thanks to continued strong demand for crossovers and pickups, as retail car sales also rose.
GM also estimated that U.S. auto sales on a seasonally adjusted basis, was 13 million for the month, the highest level of the year. The company forecast that U.S. auto sales would reach 13 million to 13.5 million vehicles in 2011 as economic growth picks up and unemployment declines.
Ford's shares were up 1 cent to $17.25 in recent trading. The stock has surged for nearly two years after falling under $2 in early 2009.

-By John Kell, Dow Jones Newswires; 212-416-2480; [e-mail]

[livinincali]

F may go down as a failed breakout based on what's happening today. Need to see how things close but they aren't looking real good right now. The market has been relentless in it's move up as sentiment measured by things such as call buying and AAII are close to all time highs. It wouldn't bee surprising to see a selloff similar to April 2010 because people aren't hedged very well right here and have become very complacent. There probably has been an urge to take profits for some investors but until support breaks they probably didn't feel a need to do so. Now you wonder if everybody tries to hit the exit at the same time. This could get ugly fast if there isn't a positive reaction to earnings in the next couple of weeks.

[totalkaos]

Wow, I feel drained. My DW is a teacher. Recently her school here in Iowa was inspected by the Dept of Education. To make a long story shorter, they have changed the State's Guidlines and what has been perfectly acceptable for the last 8 years is now not. So DW will probably lose her employment at the end of the school year. Fortunately for us she is close enough to retirement that she is to be vested in the state's pension program this October. So we have been talking to pension people, tax advisor, CPA, and especially each other, weighing the options.

They offer 8 different options to retirees. Ours was even more complicated because we had the option of purchasing up to 7 additional years of benefit if we desired. The seven years could be broke out into 3 levels each with different price tags. No sweat, we're just doing something that will affect us for the rest of our lives. One shot, no changes allowed after we sign on the dotted line.

Today it looks like our best option is to invest $25,500. DW will receive a lifetime annuity of about $2,350 and death benefit of $45,000 for her heirs. I have asked her to get a complete medical examination in late March before we sign the final papers. I have also asked her to not die prematurely. Guess we'll find out if she listens to me on that one.