rovo's Market Journal -- 2011

[rovo]

The port took a little hit today but nothing serious. HI dropped -1.48% and TBT dropped -1.18%. Both are major positions in my port. Another major did a little better as Ford fought off a potential loss and finished +O.27%. The Ford options are still showing gains and helped minimize the damage. The oils WHX at +1.30%, ATW at +0.70% and PSTR at +0.72% helped a bit. MSFT at -0.77% did not help at all. This puppy is heading for the pound in the near future.
Month-to-Date = +4.80% overall versus yesterday's +5.09%.

[tyfighter3]

Well this year should be as interesting as last year was but maybe with a different twist. I still like energy because I don't see it getting weaker as the year goes by. I"ve listened to the Guru's for the last 2 years how we should be in Large Cap stocks but ignored them knowing that a Large Cap stock would take a lot more time to tighten their belt but when they did that would be the time to start buying them up. I guess what I'm saying is this will be the year for Large Caps. JMO I'm with you ROVO on MSFT. To the pound with it.

[rovo]

Since I'm reviewing portions of the portfolio I thought I might as well publish an update on the options portion of the port since I seldom comment on what is happening there.

Background: I use a small percentage of the port to buy Call or Put options on stocks I believe are grossly undervalued (Calls) or overvalued (Puts). I may or may not have stock holdings in the stocks I'm playing with in the options. This is just a means of generating a little excitement in an otherwise boring portfolio. I do a little day trading for the same reason.

Holdings:
100 contracts NYX Jan 22 2011 $60.00 Call Bought at $0.0575 B/A = $0.00 / $0.04
400 contracts Ford Mar 19 2011 $20.00 Call Bought at $0.0577 B/A = $0.43 / $0.45
100 contracts Ford Jan 21 2012 $30.00 Call Bought at $0.2485 B/A = $0.31 / $0.33

[rovo]

I didn't do anything in the market today as my bias was downward and the market was stronger than I expected. I was watching for a play in either SQQQ or TQQQ but couldn't (or didn't believe) find an entry point. I'll see what the port did and report back in a few minutes.

The port was dragged a little lower today, MTD = 4.66%, and the damage was done by TBT, MSFT, and SIRI. I did manage to sell another 300 shares of HI at $20 from a marginal swing trade.

Oh well, there is always tomorrow.

[lovetobike]

My fertilzer stocks were down - that isn't much of a surprise.
AGU (-1.54%)
MOS (-0.93%)
POT (-1.07%)

I still think they will go up eventually and they aren't low enough to add positions. Right now they are at 14% of my entire port.

I have my eye on some stocks but funny enough, they went up today

Rovo - are you selling a small position of HI or working your way completely out of it?

[rovo]

Lovetobike,

I picked up 5K shares of HI in the IRA on expectations of excellent earnings (last quarter) and expecting a bump in the price. Neither occurred and I'm trying to off-load these 5K shares to free up cash for other plays. Think swing trade gone poorly. This 5K is now down to 3,700 shares and all sales have been profitable.

I still have 15K shares of HI in my taxable account and these will remain there until they either do better or I give up on them.

Let's think about this for a moment. Total of 20K shares represents a substantial amount of investment in a $20 stock, at least for me it does.

[heavyweightboxer]

Not much action for me today. Picked up some more F Jan call options when it pulled back. Hope it flies past $19 soon...

I like Siri but am concerned long term about Pandora and other radio options if they can't come up with new ways to put their tech to use

[rovo]

Seriously considering shorting the Qs this morning at the open, via SQQQ, as they have a large gap-up which will probably be filled this morning. Currently trying to work out the price I'm willing to pay.

[rovo]

I bought 3K shares of SQQQ at $28.1447 for a day trade. Will place it for sale shortly.

Placed for sale at $28.50 but price subject to change.

[rovo]

I threw in the towel on the SQQQ trade. Sold out at $28.2862. Netted a measly $424.61 but I guess it is better than a negative number.

[yclept]

Think of it as 10 tanks of gas -- you can smile the next ten times you fill up the tank. Who cares how much gas costs if the market is willing to give it to you! Or, even if it's the only money you make all day, it still amounts to over a hundred thousand a year.

[totalkaos]

I happened across this commentary on the history of some stock vs. interest rate intermarket relationships. You may or may not be interested in it. It should be considered this author's take. www.contraryinvestor.com/mo.htm

Let's take it with a grain of salt (also some tequilla and a lime wedge if you like

[livinincali]

Got rid of GLD for a small gain. Still holding EUO.

[yclept]

Well, I got back into EPV for a single position. I figure when the Euro gets hurt the businesses should suffer along with it. EPV is hitting new all-time lows, but I think Europe has more pain to endure. They are on McClellan's mud march and aren't going to get to Richmond.

[rovo]

Small gain in the port today, just a few thousand. MTD = 4.80

I'm going to have to pick up my game a little for the rest of the week or else I'm going to have a slightly negative week. Let's see if I can get to 5%+ by the end of the week.

Ford dropped a bit today but of course the options dropped a lot more percentage wise. TBT was showing some strength and helped the port quite a bit. Other than these two the rest were just meandering around with no notable gains or loses.

[rovo]

Late start for me today as I have been digging out from last night's snow storm. Anyway, I'm all dug out, showered, and ready to go in the market. I see there is no bad news this morning so that is encouraging.

I'm looking at the Qs (like what else is new) for a day trade but no direction is popping at me. Most likely play will be TQQQ (+3X) when they drop to a low point.

[rovo]

Buy order in for TQQQ at $161 per share. Low ball price for now but my best estimate of a doable order within the hour.

Also raised my bid price on buy order for ISRG to $270 per share from $255.

[yclept]

Well, looks like my EPV buy was a mistake. It doesn't seem right that something can fall off the floor, but I guess it's true. It's a single position, down about 4% since open, but I'll probably just watch it for a day or two unless the decline really accelerates.
We had a little rain yesterday. I guess in another half hour or so when the sun rises I'll go out and inspect the front walk to see if the water needs to be shoveled. The forecast calls for a little more rain tomorrow and for overnight temperatures in the bone-chilling mid 40s. When, oh when will this life-sapping weather end?

[livinincali]

Went long ZSL which is 2x short silver. Looks like we are going to see another leg down before it potentially bottoms. I already had bailed out on my buy the dip gold play and it looks to be confirming downside today. Stop would be a new recovery high, i.e. SLV above $30. Unfortunately that leaves a possible 5%+ loss but sometimes you just go with things that look good and ZSL is one of the better looking bottoming plays I've seen in awhile.

[rovo]

I don't see the ZSL play as being obvious to me but I'll take your word for it as you are better at the short term stuff than I am.

Yclept, Yup. Shoveling that water can be quite a task. LOL. If you get good at it they could use you in Australia.

Looks like I'm going to do nothing today. TQQQ never came close to my buy point. Of course I had to take DW to breakfast since I had dug us out. Port is looking very strong today with everything in the green. Seeing solid 5 figure gains so far.

[livinincali]

Here's the ZSL chart I'm looking at. Doesn't mean the trade will work just means the running positive divergences, broken down channel and buying volume off the lows should put the odds in my favor. Problem is all this fed intervention has people doing things that are going against the traditional TA. A couple months back people were buying stocks because they feared the fed's inflationary treasury purchases. Now they are purchasing stocks because they are going up. Things haven't been at these type of overbought levels in a long time.

[rovo]

Cali, Thanks for the explanation. I don't know how to increase my chart reading skills without asking questions.

My son is in Singapore for a couple of weeks as he is starting up a project over there. He keeps sending me emails about how hot it is over there. Poor baby. Meanwhile I'm freezing my butt off in NJ. He wants to take a quick trip to Thailand this weekend. How cool is that. I've never made it over to that area of the world.

[rovo]

Buy order entered for 1K SQQQ at 27.90. I expect a dip at little later after the treasury budget report. Currently 27.94



Cancelled order. Qs are just too strong at this point to take the risk.

[rovo]

The port was smoking hot today and everything was green except SIRI.

Ford is just tearing up the asphalt lately and set another 52 week high while gaining 2.35% today. The Ford Call options for March gained $0.07 and the Jan 2012 Call option gained $0.02.

Even HI increased 1% today and TBT jumped 1.41%. The oil stocks also did super fine today with the laggard up by 1.38%.

Month-to-date at +6.19% compared to yesterday's 4.80%.

[livinincali]

Looks like I might have jumped the gun with ZSL, but the setup isn't completely broken yet. I think I need to step away from this market again. Nothing is making sense from a traditional TA perspective. Things have been staying so overbought for so long that I really can only compare it to other bubble scenarios, which means there aren't many good trades to make. It's certainly likely that the market continues to go up in the near term but it's so hard to exit when a bubble ends. You just don't have any good markers to look for. I suppose you could use Ycelpt's crosses but you've got a lot of potential downside if you buy now and wait for those to cross because were so extended.

I just can't buy at these levels, but it is getting rather boring sitting on the sidelines. I suspect people in my position are just giving up and chasing this market at this point. Sentiment by many measures is rather high.

[lovetobike]

My fertilizer stocks took a beating yesterday but seem to have recovered today:

AGU: +3.12%
MOS: +4.82%
POT: +3.45%

DE did well today: +2.09%. that gives me an overall 135% gain since I bought it in summer '09.

And again, the stocks I've been looking to buy keep going up

[rovo]

lovetobike, Those are some great movers you have there. Do you have trailing stops in place? I never use them but a lot of people do use them. Since I watch the market most of the day I just figure I'll see a problem before a 5% stop would kick in.

[rovo]

I placed a couple of "low-ball" orders for today and will see what happens.

Buy 2K FAS at $30.00
Buy 1K TQQQ at $160.00

Both orders are for short term plays.

[livinincali]

I bailed out on the EUO long for a small loss. This stuff keeps whipsawing around. The ZSL play is working so far but I probably need to keep a tight lease on it. Too much whipsaw lately and I'm seeing small gains turn into small losses as setups aren't really extending much.

At this point I'm just waiting for the inevitable big down candle in the market but until is shows up and breaks the upward trend there's not much you can do other then buy into a very overbought market and hope it keeps going up before that reversal candle shows up. Sitting in cash is getting boring though so I know why people are still buying even at these levels. It just hasn't historically been a good time to buy into the market when the weekly RSI is over 70.

[rovo]

I missed the buy on FAS by $0.03 as it hit $30.03. Drat. I have since upped my price to 30.13 but I'm not going to chase it upward. Actually my estimate for the low was pretty darn close to the actual.

TQQQ on the other hand never came close to my buy point of 160 and the low was 164.23.