Tech Talk for Friday August 24th 2012

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(Editor’s Note:  Don Vialoux is scheduled to appear on Berman’s Call on Monday at 11:30 AM EDT)

Pre-opening Comments for Friday August 24th

U.S. equity index futures are lower this morning. S&P 500 futures are down 4 points in pre-opening trade. Index futures are responding to concerns about a growing recession in Europe and slowing economic growth in China. The Shanghai Composite Index closed at a three year low last night at 2,092.

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Index futures moved slightly lower after July Durable Goods Orders were released. Consensus was a gain of 3.0% versus a revised 1.6% increase in June. Actual was a gain of 4.0%. However, most of the gain came from aircraft sales. Excluding transportation, consensus was an increase of 0.5% versus a revised -2.2%. Actual was a decline of 0.4%.

Autodesk fell $8.51 to $27.20 after reporting lower than consensus second quarter revenues and earnings. Canaccord downgraded the stock from Buy to Hold and JP Morgan downgraded the stock from Overweight to Neutral. Target was reduced from $43 to $32.50.

Big Lots fell $0.36 to $30.40 after Benchmark downgraded the stock from Buy to Hold. Target was reduced from $45 to $33.

Bank of America/Merrill changed opinions of selected health care stocks. Bristol Myers was upgraded from Neutral to Buy with a target of $36 and Merck was downgraded from Buy to Neutral with a target of $45.

 

Technical Watch

Autodesk, Inc. (NASDAQ:ADSK) – $30.40 plunged 23.8% after reporting lower than expected second quarter earnings and revenues. In addition, the stock was downgraded by Canaccord and JP Morgan. The stock will have a negative technical profile at the opening. Intermediate trend changes to down on a break below support at $28.52. The stock also will open below its 20, 50 and 200 day moving averages. Short term momentum indicators are trending down. Strength relative to the S&P 500 Index has been negative since mid-May. Better opportunities exist elsewhere.

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Big Lots, Inc. (NYSE:BIG) – $30.40 fell another 1.2% after Benchmark downgraded the stock from Buy to Hold. Yesterday, the company announced lower than consensus second quarter results. The stock has a negative technical profile. Intermediate trend is down. The stock trades below its 20, 50 and 200 day moving averages. Short term momentum indicators are trending down. Strength relative to the S&P 500 Index has been negative since mid-April. Better opportunities exist elsewhere.

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Interesting Charts

More short term technical evidence that U.S. equity markets have passed a short term peak! Short term momentum indicators for the S&P 500 Index have rolled over from overbought levels. The Index is about to break below its 20 day moving average at 1,399.12

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Ditto for the Dow Jones Industrial Average! It already has broken below its 20 day moving average.

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Weakness in equity market sparked an increase in the VIX Index.

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One of the weakest sectors yesterday was the steel sector following a downgrade by Dahlman Rose.

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The gold and gold equity sectors were the exception.

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Updates on Seasonal Trades Recommended Since The Beginning of June

(Based on reports published by www.globeandmail.com )

June 11: Accumulate the Leisure and Entertainment sector

ETF: PEJ at $20.73 Current price: $21.51

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Comment: Units are about to break below its 20 and 50 day moving averages and short term support at $21.34. Strength relative to the S&P 500 Index has turned negative. Take profits.

June 22: Accumulate the Fertilizer sector

ETF: SOIL at $12.20. Current price: $13.74.

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Comment: Technical profile has started to turn negative. Units closed below their 20 day moving average yesterday. Strength relative to the S&P 500 Index turned negative two weeks ago. Take profits.

July 2: Accumulate the Software sector

ETF: IGV at $62.18. Current price: $63.30

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Comment: Technicals remain positive. Intermediate trend is up. Units trade above their 20, 50 and 200 day moving averages. Strength relative to the S&P 500 Index remains positive. Continue to hold.

July 6: Accumulate gold bullion

Gold price: $1,578.90. Current price: $1,672.80

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Comment: Technicals remain positive. Nice breakout above resistance at $1,642.40 earlier this week. Strength relative to the S&P 500 Index has turned from neutral to positive. Continue to hold.

July 13: Accumulate Canadian gold equities

ETF: XGD at $18.01. Current price: $19.65

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Comment: Technicals remain positive. Nice break above its 50 day moving average last week. Strength relative to the TSX Composite Index remains positive. Continue to hold.

July 20: Accumulate the Canadian energy sector

ETF: XEG at $15.12. Current price: $16.11

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Comment: Technicals remain positive. Units continue to move higher above a reverse head and shoulders pattern. Strength relative to the TSX Composite Index remains positive. Continue to hold.

Sell the Transportation Sector

Dow Jones Transportation Average at 5,126.65. Current price: 5,115.64

ETF: IYT at $91.56. Current price: $91.34

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Comment: Technicals once again are turning negative. Units briefly fell below their 20, 50 and 200 day moving averages yesterday. Strength relative to the S&P 500 Index remains negative. Continue to sell/avoid/short.

August 6: Sell the Airline sector

ETF: FAA at $28.66. Current price:$28.90

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Comment: Technicals remain negative. Units closed below their 200 day moving average yesterday and are testing their 20 day moving average. Strength relative to the S&P 500 Index remains negative. Continue to sell/avoid/short.

Adrienne Toghraie’s “Trader’s Coach” Column

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Choices

By Adrienne Toghraie, Trader’s Success Coach

www.TradingOnTarget.com


How many opportunities do we let slip by because of the comfort of knowing that we can start tomorrow? I talk to some of the same people year after year at shows who tell me of their plans to become a trader only to repeat themselves the next year. Here are some of the promises I have heard traders make that keep them from becoming the person they want to become. I will:

· Start reading that book tomorrow

· Make arrangements for that seminar

· Quit my job

· Spend more time with my family

· Plan that trip

· Take on that hobby

· Volunteer for that cause

· Give up the drugs I am currently taking

· Go to see the doctor

· Hire that coach

· Lose that weight

· Do the things that it takes to become a better trader

The fact is that yesterdays are what brought you to this moment of now and today is what will decide tomorrow. If you put off your life until tomorrow, you will not enjoy the life you want to have.

Bad choices

We lost three celebrities whose lives we have followed for many years. Ed McMann, who was the comedian who was Johnny Carson’s sidekick for over thirty years. The choices he made about his financial situation after a lucrative career brought him to a place of needing rescue from foreclosure of his home from Donald Trump the billionaire.

Farrah Fawcett, the actress and pin up girl, we lost to cancer. She created many stressful situations in her life by some of her choices that weakened her body.

Michael Jackson, an icon of rock music, abused his body with prescription drugs and his body by extreme dance rehearsals. And now his children will be without their father and the rest of us will mourn his early passing.

Good choices

Clark was a participant in my Master Class in Australia a few years ago. He is a land developer from New Zealand who decided that he wanted to enhance his income by trading. He asked many questions during the class, which revealed a lot about him. I have learned over the years that by the questions people ask I can usually tell if they will succeed in trading. At lunch I was able to learn more about him, which made me feel certain about the belief I was developing that he would be successful as a trader.

Clark told me about how he worked with his father in construction from the time he could lift a hammer and he loved every moment. He said that his father’s story telling made it not seem like work. It was from this experience that work became a pleasure for him. His mom encouraged him to save two thirds of the money he earned, so he worked extra hard because the third that he could spend would be for the games and entertainment he enjoyed. Clark’s mother also encouraged him to take care of his health by eating well and having balance in his life. Clark purchased a small property at the age of sixteen and built a small house with his father’s licenses. With the profit he earned from selling this property, he purchased and even larger property. This pattern continued to where he is today as a highly successful developer.

I recommended a trading mentor to Clark specific to his personality, and I also recommended that he take my Top Performance Seminar after he traded for at least a month. Clark completed my Trading On Target Course by the time I saw him again. He made two trips to the United States to complete both of my suggestions. After six months since I originally met Clark, he is now earning a substantial living from trading and only putting in two to three hours a day while still maintaining his business. I asked Clark how he finds trading. His response was that the whole process was a blast and he is having a lot of fun. His wife and children were also happy because they got to vacation in the states when he came to study here.

What is time for you?

Is life full of fun time in work and play? Is each area of your life developing into how you want your future to be? If not, make a plan and act today so that your trading and everything that supports it will bring you to a better tomorrow.

New Free Monthly Newsletter

More Articles by Adrienne Toghraie, Trader’s Success Coach

Sign Up at – www.TradingOnTarget.com

 

Eric Wheatley’s Weekly Listed Options Column

Good morning,

Since I’ve started this job, I’ve pretty much been a professional reader and writer. I go through dozens of articles per day and I’ve realised one has to be wary of some of the dumb things that are written in the business press.

Last week, after a string of lessons on options basics, we dove into covered calls. On Friday, as I devoured my daily ration of articles, I stumbled upon this. It was published in a national paper of some repute and wonderfully frames what I meant in this little paragraph:

George got $2.50 for a three-month call option. In selling the option, he promised Bob that he would sell his 100 shares to Bob for $50 per share if the stock’s price were to rise. Of course, the first knee-jerk reaction to this is that putting a ceiling on one’s potential gains for a measly $2.50 is stupid; particularly if you are holding the shares, so if their price drops through the floor, you’re on the hook. (Put another way, the MOST George could gain is $2.50, yet he could lose his shirt if XYZ were to drop to zero. This concept is hard to defend if your interlocutor has little understanding of finance and just wants to get rich in the stock market)”.

Long-only stock pickers are a fun group of people. They usually have little time nor tolerance for charts or derivatives. The best of them will plough through financial statements and attend conference calls with company directors and otherwise do everything they can to outwit the markets and beat the benchmark (which they pretty much never do because of their fees). They have one and only one goal to which they are wholly dedicated: to find stocks that will go up faster than the index.

When a stock picker is asked about passive investments, short selling, complex portfolio management techniques and, especially, covered calls – things that are completely foreign to their daily lives and, let’s face it, which don’t generate fees for their firms – he or she will become hostile and start spewing out things which, for all intents and purposes, run against decades of academic study and common sense. Upon reading the aforementioned article, here are some statements which caught my eye:

· “90% of options expire worthless”. We’ve covered this at least twice in this space. It’s a non-starter because the statement itself is nonsensical. Options are asymmetrical instruments, like insurance policies, Russian roulette or lottery tickets. People who live in the fully symmetrical world of stock picking (things go up, things go down) have trouble with this concept.

· “If the price of the underlying stock collapses before the call expires, the call-buyer won’t exercise the option because the stock can be purchased more cheaply on the open market compared to the contract strike price. In this case, you continue to own the stock – with all of its downside – but you also keep the premium income”. Note the term “collapses”. The same statement could have been made by writing “…the price of the underlying stock is below the call’s strike price at the call’s expiry”. But no, if you carefully evaluate and buy a stock for your long-term portfolio, it will “collapse”, not move within a predictable range as 95% of stocks do over the short term. It’s also odd for a stock picker to mention “all of a stock’s downside”, given that stock pickers hold even greater downside risk than covered call writers.

· “If the stock soars, the call-buyer will exercise to buy the stock at the (below-market) strike price, forcing you to sell the shares below the market price. So, you get virtually all of the downside risk exposure while cutting off most of the upside potential. And given the history (and expected future) of generally rising long-term prices, this strategy’s long-term potential is not attractive”. In this case, of course, the stock “soars”. Yes, the long-term tendency for stock prices is to rise. Also, we have already gone into the fact that stock options are unique in the options trading world in that they have a skew built into their prices. In-the-money calls are more expensive than in-the-money puts BECAUSE stocks are asset-based securities and have a long-term tendency to gain value.

· “In other words, this strategy negatively skews the risk-return profile. Covered call writing strategies are promoted as a source of income with less risk than owning stocks outright. But adherents to this approach are giving away too much future upside in exchange for current income. The amount of forgone upside may well dwarf the extra income over time”. Here we go.

· Study after study (those are just two I got from a quick Googling) going over the subject over various time periods in all market conditions have shown that covered calls skew the risk-reward ratio in the investor’s favour. Why does the argument against covered calls get any traction? Because stock pickers and options neophytes assume that the premium received when selling an option is a pittance or a rounding error which can be brushed aside in one’s calculations. “Oh yeah, you get that tiny little premium, but what if the stock COLLAPSES? What if it SOARS??”. The fact is, anyone who has spent any time in the markets knows that stocks don’t collapse nor soar all that often. The POTENTIAL for collapses and… soareses is already priced into the options’ premiums. When you sell an option, you are receiving the market’s evaluation of the probability AND AMOUNT of collapse or soar. Sure, over any given period a stock could be more volatile than what the market evaluated. But over an investment horizon of years or decades, the options market has proven itself to be rather accurate in its valuation of volatility. As we have already seen, if anything, the path-dependant nature of options market-making adds a little juice to options prices, which goes into options writers’ pockets.

Also, as a portfolio manager, here’s a hint to the gentleman: I was an options trader and draw upon that experience to my clients’ benefit. I’ll grant him that in a secular bull market, covered calls may underperform the straight holding of stocks. You know what I’d do in a strong bull market (e.g. 1994-1999)? I wouldn’t be putting on covered calls. If he’s intimating that covered calls are bad RIGHT NOW, then we have a distinctly different definition of a secular bull market.

As to “Option trading is a quant game and big options traders – who often exclude traditional money managers – are in the best position to find pricing inefficiencies with their sophisticated computer models that can make decisions in a nanosecond”. Ummm… not even close dude (and this is the best proof that the writer in question has no clue). Nanosecond trading based upon models and/or electronic arbitrage exists in futures trading. It exists in stock trading. But if anyone thinks that you can actively trade options in-and-out on a “nanosecond” basis, that person has never actually seen an options quote, much less put their money in play. Options are a segmented market. Any given stock can have dozens or hundreds of different listed options across different strike prices and expirations. The liquidity on those options is therefore also segmented. Even on the biggest, most liquid options classes, if you try to buy and sell mechanically on an in-and-out basis, you’ll be paying the bid-ask spread on instruments which just aren’t made for that kind of trading. The “quants” and their models will try to take advantage of perceived opportunities, but the resulting position will inevitably be held for a while and probably be traded against in the underlying market. This has nothing to do with the program trading intimated in the text.

So, in closing (and you can tell that I could go on all day), don’t get options advice from a stock picker. Stock pickers are undoubtedly good at what they do, but they don’t use options and, if you don’t use them, you don’t understand them enough to comment on them. I’ll always affirm that options aren’t really all that complicated if you’re actively interested in learning about them. If you aren’t, please keep your commentary within the bounds of subjects on which you have some knowledge.

*****************

New development: I’ve gained a little experience in the world of Twitting over the past couple of weeks and have realised that the bilingual idea wasn’t going to work. I’ve therefore decided to start a new account on which I’ll be posting articles which, to my mind, offer some value-added commentary on the world of economics and finance along with my usual facetiousness. From now on, I’ll post two or three which I really liked in this space. If you want, you can follow me at @jchood_eric_en.

· An overview of the European crisis and its inevitable conclusion (or so says a geopolitical guy whom I really like, though I may not always completely agree with).

· An analysis stating that the Canadian housing market isn’t a bubble and will be fine as long as nothing, y’know, unpredictable happens (filed under “gotta love economists”).

· A contrarian view as to the reinstatement of Glass-Steagall and the wisdom of splitting up big banks.

In this week’s French-language blog: a buddy brings me to one of those shiny-pole-filled places which fascinate visitors to my hometown and which will not be described explicitly here.

Cheers!

Éric Wheatley, MBA, CIM

Associate Portfolio Manager, J.C. Hood Investment Counsel Inc.

eric@jchood.com

514.604.2829; 1.855.348.2829

Twitter: @jchood_eric_en

Blogue en français : gbsfinancier.blogspot.ca

*****************

Little known fact about John Charles Hood #40

John Charles Hood knows a few stock pickers. Apparently, they flick quite well too.

 

Special Free Services available through www.equityclock.com

Equityclock.com is offering free access to a data base showing seasonal studies on individual stocks and sectors. The data base holds seasonality studies on over 1000 big and moderate cap securities and indices.

To login, simply go to http://www.equityclock.com/charts/

Following is an example:

Consumer Discretionary Sector Seasonal Chart

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Disclaimer: Comments and opinions offered in this report at www.timingthemarket.ca are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed.

Don and Jon Vialoux are research analysts for Horizons Investment Management Inc. All of the views expressed herein are the personal views of the authors and are not necessarily the views of Horizons Investment Management Inc., although any of the recommendations found herein may be reflected in positions or transactions in the various client portfolios managed by Horizons Investment Management Inc

Horizons Seasonal Rotation ETF HAC August 23rd 2012

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51 Responses to “Tech Talk for Friday August 24th 2012”

  1. Paula/NS Says:

    tony,

    Thanks for your comments last night. I have to go out today so can’t be at the computer to watch the price movement. I’ll have to make a decision when I get home.

    Paula

  2. Couch Says:

    Tech Talk
    Excellent report this morning as when to sell,hold,short and avoid!!
    Thank You
    Couch

  3. Rol Lew Says:

    ” ”
    Tawny Says:
    August 23rd, 2012 at 10:10 pm
    Rol Lew

    You believe the trade in all gold stocks is over for now? Or just YRI? ” ”
    ……………………………………………………

    Tawny,
    Yes- “I believe” that the bull trade in all gold stocks is over,
    until the first week in October, and I “expect” a sharp sell-off
    to start any day now. And I “believe” this moreso about yamana,(vs aem or abx, say)
    because yri-t has alrady reached the top of it’s trading range, from last year.

    Of course this view could prove to be totally incorrect, as nobody can predict
    the future path of any stock. If somebody launches an big surprise attack in the
    middle east or europe tonight, watch how fast the future will change.

    And just because yri-t had a BIG DOWN September in 2011, it does NOT follow
    that Sept 2012 will unfold in the exact same fashion.

    But I can only make a guess………… and my guess is,
    yri-t does not have much further to run

    http://stockcharts.com/h-sc/ui?s=YRI.TO&p=D&yr=3&mn=0&dy=0&id=p41073386768

  4. Rol Lew Says:

    And although abx.to “looks” like it has lots of room
    left to go UP from here, the oscillators are now in danger
    territory, so for me, I would not be entering new trades here either.

    http://stockcharts.com/h-sc/ui?s=ABX.TO&p=D&yr=3&mn=0&dy=0&id=p14555379689

    Seasonal or not, we still want to try to buy low & sell high,
    not buy high & sell higher.

  5. Tard Says:

    Hi Eve:
    http://stockcharts.com/freecharts/gallery.html?PDN.TO

    PDN had a gap up last week. Wondering if price will come down to close that gap.
    Could you please shed some light?

    I learnt about what gaps are but don’t know how this gap will work out.

    Thanks! Tard

  6. Rol Lew Says:

    http://stockcharts.com/h-sc/ui?s=AEM.TO&p=D&yr=3&mn=0&dy=0&id=p31811923654

  7. Heinz S Says:

    To Techtalk:
    I like the clarity of the “Updates on seasonal trades”. Thank you.

  8. Tawny Says:

    Tech Talk

    I echo the others – great to see updates on seasonal trades… much appreciated by all!

  9. Tawny Says:

    Rol Lew

    Thank you for your views on the gold stocks as reqquested. Tech talk say to HOLD.
    So I am watching closely. I hold HGU and Newmont in canada NMC… watching closely and may take some profits sooner than the targets set… will see. I sense the market is stronger than it seems it ought to be..can you believe GREK is up 2% at the moment!

  10. Rose Albert Says:

    I really appreciate the updates on your previous recommendations. These updates are very useful especially for newbies like me. This is the first time I have seen analysts give updates on their previous recommendations. Your initiatives on updates will hopefully be picked up by other analysts and do it as well. With thanks and gratitude.

  11. Brian/ON Says:

    Rol

    Thanks for the update. I closed off my holdings of ABX and AEM today. Right now they are getting to oversold, and September is a month that I aim to be in cash, and we are close enough now. I made a little nice profit over the last couple of weeks, and I always feel good about taking a profit.

    Brian

  12. Eve Says:

    Rol Lew,

    October is known as the WORST month for gold stocks – Don V. has stated this too! Plus, gold stocks tend to go up “every” month AT THE “END” of the month and into the first day to few days of the new month (happens about 85% of the time I’d say – which is why I put “every” in quotations) – so, come the end of August, the gold stocks should go up into the first week to 10 days of Sept. They should pull back here until next week (the end of August). And then go up at the end of Sept into the first day to few days of October – and then down for the rest of October.

    They not only did this in 2011 (as you’ve mentioned today about Sept in your post) – they sold off each Sept going back to 2009 after the first week to 10 days of Sept.

    IF you buy the gold stocks in the first week of October, then expect for them to go down for the rest of the month. I just wrote about this yesterday to “tard and Ania” (and have wrtten this many many times in the last several months too). Then, at the end of October, they will go up and usually, November is a month for the gold stocks like August is – in that the gold stocks have a bullish bias and on pullbacks, usually only pull back to the mid keltner area and then go up again – in October, their bias is “bearish”. Look back to see this from 2009 to 2011 – plus as I’ve mentioned, Don V. has stated this too that October is a bearish month for gold stocks! So, if you don’t want to believe me on this, then at least believe the man who’s been doing this stuff for 20 years or longer (is just a guess on my part).

    eve

  13. Ania Says:

    Hi Eve,
    I am glad that I sold ELD.to and waiting for the stock to pull back. Do you think it is better to wait until the end of Oct to take a position and carry it to the end of Nov. I appreciate your insights and kindness. I think the seasonality for energy “XEG.to” is from July to beginning of Dec with pull back here and there.
    Many Thanks, Ania

  14. Freddebuoy Says:

    Thanks, Don, for your “Updates on Seasonal Trades Recommended Since The Beginning of June” section. Very much appreciated.

  15. Freddebuoy Says:

    Here is an interest rate forecast from National Bank Financial (in my past experience, tables don’t always reproduce well here – I hope it is at least readable.

    What I find very interesting is that we can’t expect any increase in interest rates on either side of the border. And since interest rates move in sync with equities (in normal times)what is that saying about our investment future?

    Forecast dated August 20, 2012
    United States
    Quarters Fed Fund 3 Mth Bill 2YR 5YR 10YR 30YR
    08/17/12 0.250 0.066 0.286 0.795 1.810 2.931
    Q3 0.250 0.081 0.291 0.635 1.521 2.626
    Q4 0.250 0.082 0.270 0.664 1.582 2.633
    Q1 2013 0.250 0.064 0.191 0.532 1.431 2.510
    Q2 0.250 0.128 0.313 0.878 1.890 2.840
    Q3 0.250 0.137 0.314 0.996 2.076 2.984
    Q4 0.250 0.143 0.352 1.077 2.177 3.080
    Canada
    Quarters Overnight 3 Mth Bill 2YR 5YR 10YR 30YR
    08/17/12 1.000 0.996 1.199 1.496 1.944 2.475
    Q3 1.000 0.984 1.139 1.455 1.680 2.247
    Q4 1.000 0.982 1.180 1.517 1.757 2.311
    Q1 2013 1.000 0.938 1.038 1.397 1.652 2.200
    Q2 1.000 1.050 1.236 1.572 2.095 2.581
    Q3 1.000 1.165 1.561 1.837 2.287 2.763

  16. Tard Says:

    Freddebouy:
    Re: 15 Further to info on banks:

    RY and TD have raised their mtge rates this week.

    TD Canada Trust is raising the interest rate it will charge for a three-year term mortgage, matching a move earlier this week by Royal Bank.

  17. Rami/AB Says:

    I hate it when I get busy for 1 hour and market changes direction very quick before I could do anything. I had 2k profit on HVU.TO (which I bought 2 days back) this morning and I got busy at work and now I checked and I am in the red. I didn’t want to put a stop loss because I was afraid that it will get triggered and then go higher again and now this happens. I hate that grrrrr……

  18. Rami/AB Says:

    What I hate more that the market is just moving based on romurs only. So Bernanke said the same thing that he said in the FOMC so whats new?
    I am so mad

  19. Tard Says:

    RE post 5:
    I know we have an expert on GAPS. Could you please shed some light on how the gaps close. Looking at PDN.TO link on post 5. Know what they mean but what is implications on future stick price?

    Thanks.

  20. Tard Says:

    Eve:
    What does your crystal ball say? Will Monday be an up day or down day?
    You were right about this past Monday. :)

    Tard

  21. Tard Says:

    Found an answer to ? on Gaps: Sharing the lesson

    http://www.investopedia.com/university/charts/charts8.asp#axzz24UWxh4tZ

    Help Ever Hurt Never :)

  22. Tawny Says:

    Tard

    Glad to see you got resourceful.. thanks for sharing. I can pretty much find everything I want an answer to by simply asking Google! My bet is that if the markets close without losing much of todays strength, it will bode well for Monday. Not very technical answer though I understand it is at the end of the day the pros show what they think in terms of market action.

  23. CJ Says:

    Tard #21 – Help Ever Hurt Never :) – Like your attitude my friend!

  24. CJ Says:

    I took small profit today in CGL and took a loss on a partial sale of FAS (too soon) but I got scared cuz I was using broker’s funds *shock* (I really hate debt!!!) Still hanging on to the rest and hoping financials have a few good days.

    NTR
    FYI
    Just a little explanation of why I am not here much; as many of you know we have been battling cancer in this household for 14.5 years. Gordon has had bone metasteses for that long, responding very well to most treatments, struggling with drug side-effects, but maintaining a fair quality of life. Well there are no more meds in the near future pipeline that he is eligible for except a treatment that is a monthly injection of Radium 223 (Alpharadin) – We have been getting all the information, scans, reports to Goshen Indianna, and just had our passport pictures taken today. Not sure if we are up to 2 day trips down and another 2 days back – but we were gung ho to try…..however we learned yesterday that “The Nuclear Regulatory Commission has suspended the Alpharadin Expanded Access trial in Goshen, IN. There is no concrete word on when NRC will reopen Goshen.”

    There seems no concrete word as to when the trial will begin here in the Toronto, Canada area either – it is far enough ahead that Oncologist does not think Gord will be around by then. This had given us such hope, and we have been working towards it since beginning of the month so this took the wind out of our sails.

    Next plan – The Cross Hospital in Edmonton

    Of course, no OHIP coverage out of country (drug is free, but the hospital doctors nurses admin costs total 12,000!!!) Don’t know what can be arranged outside province yet.

    Off to e-mail Edmonton next!!

  25. Paula/NS Says:

    NTR

    CJ,

    My thoughts and prayers are with you and Gordon in your battle. I think you have the right attitude in fighting this disease.

    All the best,
    Paula

  26. tony Says:

    NTR

    CJ

    My prayers are with you, I understand greatly as my grand-pa went tru it he battled for for all of my 13yrs before passing away. those vague memories of a little child his cancer was contained but the last years the cancer accelerated.

    I hope your family is united together in these trial moments. as much as he needs to feel loved from is family and friends, and you need support to live through it.

  27. tony Says:

    CJ

    FAS

    For the time being if you can gt out at 96-97$ in the next few days I would take the hit as options seem to say it the trade is limited at best.

  28. Martine Says:

    NTR

    CJ,

    You are so courageous. Please don’t give up. My thoughts are with you and Gordon.

  29. Rol Lew Says:

    Hi Eve,
    Thanks for all of the points in #12 today.I am up with my gdx trades this year thanks to all of your discussions, and also to points / stocks that Muntazir & others have as caused me to look into. I have been making my “guesses” based on gdx.

    http://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=3&mn=0&dy=0&id=p64478968346

  30. Marc ON Says:

    love the updates DV!! should keep it going into the future.
    hbu trading nicely with gold. anyone have thoughts on Sunridge Gold (SGC)?

  31. tony Says:

    Marc

    never get into a company that is trending -tively while all others are trending higher.

    you only do this should a company trade +ve while its sector is trending lower.
    better yet look for pullbaks to move in as this is a company that is stronger then its peers.

  32. Ania Says:

    Hello Eve,
    Re: Post 13

    Please ignore the request. You have already responded in regards to Eld.to and Gold. The only sector I am wondering about is energy and the right entry point for XEG.to.

    Have a wonderful week-end, Ania

  33. Rami/AB Says:

    Hi Tony,
    If you have time can you please check the options for the VIX and the SPX and tell me what you see there. I checked the Vix and it seems to point that its going to go higher from here. As for the SPX I could not figure anything. Thanks.

  34. Rol Lew Says:

    Tard, Re Thursday’s

    ” ”
    Tard Says:
    August 23rd, 2012 at 2:57 pm
    Any input or comments appreciated!

    Decision time buy POT or Agrium and at what price?
    Anyone interested in POT.TO? Day low $40.88. Looking to take position when it hits 38-39. ” ”

    Chris says that a better buy point is coming for AGU.
    But he does not talk about POT here

    http://seekingalpha.com/article/822851-status-quo-at-agrium-a-concern

  35. Ania Says:

    Hi Eve, Rol Lew, and Tony,

    I want to buy the inverse/bear ETF for IYT and have tried searching through the web, but I couldn’t find the right inverse ETF. Do you know what the ticker for bear IYT ETF.
    Many Thanks, Ania

  36. Ania Says:

    Hi Tech Talk,

    I join others to express my gratitude for your every day post, education, and recommendations. May you have peace, health, and success.
    Many Thanks, Ania

  37. Rol Lew Says:

    http://etf.about.com/od/etfinvestingstrategies/a/Inverse_ETFs_List.htm

    Ania,
    I could not find an inverse for the transports IYT.

    Maybe just wait it out, and wait for an oportunity to go long IYT?

  38. Rol Lew Says:

    http://etf.about.com/od/etfinvestingstrategies/a/Inverse_ETFs_List.htm

    Ania,
    I could not find an invers for the transports IYT.

    ……………………………………………

    I was curious as to what’s in IYT

  39. Rol Lew Says:

    These

    http://stockcharts.com/freecharts/candleglance.html?IYT,KSU,FDX,UPS,UNP,CNW,NSC,JBHT,OSG,ALEX,EXPD,CNI|B|A12,26,9

  40. Rol Lew Says:

    Oops…. not CNI or KSU, just the others

    And these,

    http://stockcharts.com/freecharts/candleglance.html?IYT,CHRW,CSX,GMT,LSTR,R,LUV,JBLU,YRCW,|B|A12,26,9

  41. Ania Says:

    Hi Rol Lew,

    Thank you fro taking the time and answering my questions. Many Thanks, Ania

  42. Ania Says:

    Hi Rol Lew,
    Here are few companies in IYT: Union Pacific Corp – UNP,FedEx CorporationFDX Long 9.6% 0.00% $49.5M
    United Parcel Service Inc (UPS) Class BUPS Long 8.2% 0.00% $42.1M
    Norfolk Southern CorporationNSC Long 8.1% 0.00% $41.3M
    GATX CorpGMT Long 5.8% 0.00% $29.6M
    CH Robinson Worldwide, Inc.CHRW Long 5.7% 0.00% $29.4M
    Kansas City Southern, Inc.KSU Long 5.7% 0.00% $29.3M
    J.B. Hunt Transport Services, Inc.JBHT Long 5.0% 0.00% $25.8M
    Landstar System, Inc.LSTR Long 5.0% 0.00% $25.8M
    Alaska Air Group, Inc.ALK

  43. Kim Schumacher Says:

    The updates on the seasonal trades each week is very much appreciated! Nice work!

  44. kam Says:

    Hi Ania,
    I want to chip in your ego/eld.to trade too. Last couples of years it have its high of the year in end august /early sept. So you might want to watch out before getting back in even later on in oct. unless it sells off more than other gold stocks then it might go back up otherwise you have your run at it,made money and find other gold stocks to trade.I used to trade it during summer of 2010 when Jim cramer pumped it as the world’s best gold stock but since those days it is usually laggard to other gold stocks except during summer(june/july) when it jumps up every year and goes to almost year’s high and then don’t do much or dies.
    I can’t do any TA and Eve has done it so my view is from just behavior side of this stock every year lately. Its big brother(ego) in USA ran into 200ma and dropped and eld.to didn’t even made it to 200ma.
    All these above things are null and void if gold have another run at 1925 :)

  45. kam Says:

    Rami/AB Says:
    August 24th, 2012 at 2:19 pm
    I hate it when I get busy for 1 hour and market changes direction very quick before I could do anything. I had 2k profit on HVU.TO (which I bought 2 days back) this morning and I got busy at work and now I checked and I am in the red. I didn’t want to put a stop loss because I was afraid that it will get triggered and then go higher again and now this happens. I hate that grrrrr……
    Rami/AB Says:
    August 24th, 2012 at 2:22 pm
    What I hate more that the market is just moving based on romurs only. So Bernanke said the same thing that he said in the FOMC so whats new?
    I am so mad”

    Hi Rami/ab,
    You have $2k profit on hvu and you didn’t put a stop on it? If you were worried about getting stop triggered then put a stop at $14.85(below the daily gap of 14.97) or at $400-500 profit atleast which should have been way down than low you think for the day might be. Some lesson should be learned from this.i can’t even go to washroom without a stoploss when i am trading hvu and you were not even able to trade it and have no stoploss is a big mistake.
    We have talked about it being a fearfactor trade. I will try an example for it .hopefully My example is close enough to what Vix/fear trade is,lol. Remember when you are going thru horror house at universal studio and fear is so high and kids running backwards with fear. Now soon as we see the exit door your fear drops 50% and once outside the door its gone within a minute UNTIL the next horror show or something like that.So bernanke showed then the exit door for that day and fear is gone and vix went down very fast and so do hvu.to. tomorrow is another day and another show ,it could be more or less scary comparatively.
    Bad economy has how much to do with traders buying/selling puts on a given day could be tough thing to analyze . Even if they announce QE3 this weekend but that just won’t drop volatility to zero.It might even pick up more after decline of couple of days as post QE3 sell on the news or price of SPX compared to reality of USA economy might put another fear in traders and cycle of buying/ selling puts starts again and $vix will go thru the horror house again and drop once ‘exit’ door is in the view.
    In the end two things should be remembered by all fellow hvu/uvxy traders.
    1. that they lose 12-15% atleast a month over time in hvu/uvxy if vix stays at same price and it almost always stays in contango to the next month’s future contract(except few times when vix fly too high and fear in coming months is low). so hvu have to go up 15% or so a month to break even.
    2. volatility/fear always comes down in the end after sudden spike and so the Vix of spx ‘reverts to the mean’and stay low most of the time. We entering horror house are “don’t worry be happy” crowd. After couple of skeletons “we are nervous” crowd.In the middle of the horror house we are “panicked” crowd and praying for life.Once the exit door is in sight, Panic turns to nervousness and once out we are “don’t worry be happy” for long time.
    In the end Rami/ab why hold something without a stoploss which will revert to mean eventually and is built to do lower lows over time.When we had last good discussion about Vix then HVU.to was $2.95($29.50 post split nowaday price) and I said it will keep going down and we might not see $2.95 again.Right now we are at $1.42 comparative price. Over same time Vix is down 16% and HVU is down 51%.

  46. tony Says:

    Rami

    HVU
    this is a trading vehicle its the same as driving you never take your eyes off the road, and here sorry to be harsh on you but you just took your eyes of the road when you take your eyes off of it is that you have decided to get out.

    As Kam mentioned, you should have set a stoploss. better yet being a trading vehicle HVU Has to be monitored at the open so if it pulls a fast one (stop loss would have been useless) You should have sold if it fell beyond what you can withstand.

    When I trade a BEAR or BULL ETF my tolerance increases to 10%. as this can easily be made in right at the open.

  47. tony Says:

    RAMI

    SPX

    they are to bullish, if you look at some strike prices like 1370 they are buying this price but are selling the 1380 and 1390 and then buying all the calls up to 1425 which there is no activity or scarce.

    1425 puts are being bought but below they are selling.

    This is an odd type of event this is where you must be asking questions why are they buying everything exept for this strike price plus the volume was so erratic you fall from 200 to 100 and are back trading at 200 contracts,

    I think the best time to be trading is after the HFs have finished bragging about their summer vacation in their french villa, have the routine back and running so lets wait and see what they will call after the 3rd friday of the month.

  48. Ania Says:

    Kam,
    Thank you very much for your insights. What other gold stocks would you suggest instead of ELD.to. Many Thanks, Ania

  49. Rami/AB Says:

    Kam,
    Thanks for your response and trust me I am mad about my self too. I meant to sell HVU.TO at the end of the day on Friday because I was thinking that people would panic before the weekend and this is not an excuse for not putting a stop loss. I checked HVU.TO at market open and then went to work and usually when I reach work I have time to check the market again regularly but unfortunately I got so busy for 3 hours and was not able to check my stocks and I was so surprised at the sudden change in market direction that day. Anyway now I have to deal with it on Monday. Hope this will not be a big loss.

  50. Rami/AB Says:

    Tony,
    Thanks for your response and I should be more careful I think.
    re SPX,
    Are you saying that the market did not decide where its going to go

  51. Tard Says:

    Rol Lew,
    Thank you for #34.

    AGU is definitely a better choice than POT because it is diversified and has retail business. I read farmers can do without Potash but they need Nitrogen that AGU produces.

    Tard

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