Ray's Review of 50% Gains Portfolio - Aug 24
Actually this is an EOD Aug 28 review of the EOD Aug 24 portfolio.
I'm at work, waiting for a Data Warehouse load to complete, and I thought I would use my previously described MACD method to evaluate the short term prospects of Dale's posted Aug 24 portfolio.
Please note that a lot of stocks, as well as the DIA and QQQ are cresting (or have recently crested) the top of a waveform - this unusual occurrance (convergence) is the reason I'm violating my balance rule and am currently 100% short. Possibly we're at the end of a 5 week dead cat bounce off the late July lows and we're beginning 5 weeks of slide. Today was a good day.
I'm not usually so negative, but this IS a bear market, and my charts are SCREAMING SELL and SHORT just like they were SCREAMING BUY and LONG at the end of July. I usually don't like to be long going into September and October, but this year it is just soooooo obvious to me.
Of course, 5 good strong up days and all those negative charts will look much brighter. I give that a 10% chance of happening. Did I mention I'm VERY bearish right now?
HOLDINGS:
CATEGORY - STOCK (COST BASIS updated periodically to reflect averaging into positions)
FINANCE -
ACGL (18.31) - 27.94 - you could be cresting a top waveform here, this might be a good short unless you suspect imminent news. There is some doubt here though, I'd like to see 1 or 2 more days on a downturn before I closed out this position. Though I am seeing a floor under the stock for the last week - usually a bad sign for a long. That floor scares me, as it usually means the MM is shorting heavily - though it could mean they're lightening their short position and are about to run it up, though I doubt that scenario given the DIA and QQQ (push in the direction you are already moving). Might be a good short right now, though this isn't what I would call a good candidate for a short since it's not really volatile. I'd say it's primed for a 20% slide down in the next 2 weeks though. HOLD 1 or 2 Days, Maybe SELL and SHORT.
ACGL OCT 35 calls (.9) - Stock at 27.94 - Ouch! If these are worth anything, I'd get out, unless you're expecting big news.
AFL-short (27.1) - 30.02 - I shorted this myself a few days ago at 31. Minimum drop here is to 29 where there may be some resistance at the 200 EMA. If it goes past that, at least to 25 in 2 weeks. HOLD
BBX Nov 12.5 calls (.4) - Stock at 10.14 - Ouch! I'd SELL.
BFCFB (7.55) - 6.49 - Possibly a reasonable long right now. HOLD
CERG (3.78) - 2.31 - rising waveform after a steep drop - HOLD Cautiously, might be on a dead-cat bounce. If a downturn is seen, SELL.
ET (3.33) - 4.22 - Cresting waveform. SELL and SHORT.
FMT (4.3) - 5.69 - Cresting waveform after a high floor. SELL and SHORT SHORT SHORT.
IPCR (28.89) - 29.33 - 3 days past Cresting waveform SELL and SHORT
MAXF (3.48) - 6.00 - you could be cresting a top waveform here, this might be a good short unless you suspect imminent news. There is some doubt here though, I'd like to see 1 or 2 more days on a downturn before I closed out this position. Might be a good short right now, though this isn't what I would call a good candidate for a short since it's not really volatile. I'd say it's primed for a 20% slide down in the next 2 weeks though. HOLD 1 or 2 Days, Maybe SELL and SHORT. (Sorry Dale, I know you like this one, and I bought it at $5 only 3 weeks ago on your advice and my charts, but I closed it at 6.20 2 days ago based on my charts)
MCGC (17.9) - 16.80 - Still in a rising waveform - HOLD
QBEIF (3.35) - No chart, no comment, no trade
ENERGY –
DUK (24.35) - 27.29 - Early Cresting waveform same comments as MAXF
OIH (48.16) - 53.99 - Early Cresting waveform same comments as MAXF
PGO (1.75) - .62 - Mushy place in the chart - HOLD (you are expecting some good lightning here, aren't you?)
PGO Nov 5 calls (2.2) - Stock at .62 - Ouch!!!! even with the lightning, yeouch!
BONDS -
LVLT 2008 11% Bonds (58) - No chart, no comment
NXTL Sep 2007 bonds (76.50) - No chart, no comment
SOFTWARE -
JDAS (13.3) - 12.32 - I posted on this one in the SI column for JDAS. Long at 11.70, out at 14.40. I expect this to head to at least 10.5 - SELL.
TRANSPORTATION -
KZL (23.4) - 24.41 - Not enough data to comment. Given my feelings about the market, I'd SELL.
SKYW (18.3) - 15.41 - Mushy place in the chart to be - Given my feelings about the market, I'd SELL.
BUSINESS SERVICES –
COGI (2) - 1.81 - Mushy place in the chart to be. The real problem here is the lack of liquidity. I'd rather be in PGO, that's why I sold my COGI today and will put the money into PGO tomorrow or Tuesday.
REAL ESTATE -
NFI (22) - 28.18 - Early Cresting waveform same comments as MAXF, though not as strongly on the short idea.
BROADCASTING -
DIS (17.3) - 15.40 - Mushy place in the chart to be - Given my feelings about the market, I'd SELL
L Jan 10 calls (1.10) - Stock at 8.48 - Ouch! If these are worth anything, I'd get out, unless you're expecting big news, though there is a lot of time on these guys.
MCCC-short (5.85) - 5.35 - Mushy place in the chart to be - Not where I like to short a stock - Given my feelings about the market, I'd HOLD. Good thing you're short.
MIHL (3.3) - 3.09 - Still in a rising waveform - HOLD
RETAIL -
GRTS (20.25) - 20.65 - Mushy place in the chart to be, though I am seeing a floor under the stock for the last week - see my comments about floors in my comments on ACGL
KSWS (19.32) - 18.40 - SELL fast, you're headed to 15.
STZ Sep 30 calls (.4) - Stock at 27.15 - SELL fast, any price.
COMMUNICATIONS SERVICES -
NXTL Aug 10 calls (1.70) - Stock at 7.79 - Aren't these expired? or are they Aug 10 of 2003? Stock is Early Cresting waveform same comments as MAXF
SBC (30.3) - 25.81 - Mushy, but there is a trend. I'd say you're headed for at least 22. I'd SELL.
TWTC (1.18) - 1.09 - Under zero long shelf after a deep dive, kind of like you're under the arctic ice. My favorite place to go long, though I wouldn't go long anything right now. Could be some support at $1.00. I'd guess HOLD.
DEFENSE -
PVAT (3.25) - 3.53 - Early Cresting waveform same comments as MAXF
BIOTECH –
IXJ (42.03) - 41.12 - Cresting waveform. SELL and SHORT
COMMUNICATIONS INFRASTRUCTURE -
OCPI (1.18) - 1.12 - Same comments as TWTC, though you haven't been under the ice as long. You could be waiting 3 months for this to move.
RSTN (.91) - .92 - Same comments as TWTC
INTERNET -
ZIXI Nov 5 puts (2.15) - Stock at 3.62 - Mushy place in the chart, though a downturn is developing. My favorite short. I've got 100 shares left that I wasn't forced out of at 5. I originally shorted this puppy at 45. Two days ago I bought these same puts for 1.85. HOLD
Final comment - Dale - I've noticed this before with you, you're on the wrong side of A LOT of option positions. I'd like to see a spreadsheet of every option position you've entered over the last 2 years, and whether you're net up or down. My guess is that there are some positions you've made big, big money on, but that those big gains are clouding your mind to the possibility that most positions were losers for you, and the cumulative effect of the losers more than outweighs your gains. Please tell me if I'm wrong; but if I'm right, I would suggest that you throw in the towel on options trading, at least until you figure out how to trade them more effectively. My boss at the commodities firm had the following rules for options: 1) don't think past 4 weeks, 2) trade them on the floor and scalp those hefty premiums and 3) options expirations have a huge effect on premium - eat premium right before expiration. Now, since you don't trade on the floor, rules 2 and 3 don't help you. But the MACD and rule 1) do help help. Hint: stop trading options until you get better at the MACD predictions, then trade to a 4 week horizon.
Damn - 2 hours and 10 minutes and the friggin load still ain't done. I'm going home and let the load run overnight.
You be careful out there
Ray |
