Ok I am getting a late start on this post. It is 9:52 PM and it has been a great, but busy long weekend. I can't get into all the details right now, but here is a taste:
Early, early morning Friday catch a fish or two, temporary out new crown in, sign some real estate papers, look at some real estate, start packing for Utah, pick up dinner at the local Italian place, work on Garage Band Software, evaluate the market movement (Green Flag More Later), run some more stock screens, read book about technical trading, play with Garage Band software, up early Saturday, breakfast with the guys (Including Ben M. yay!, It was kinda like show and tell), come home apply anti stress therapy to wife who is in packing to go to Utah mood, peruse Barron's, get ready for Ben's Daughter's high school graduation party, got to said party, eat copious amounts of sushi and sashimi, drive to old Huntington Beach to Chris B's wedding, got to country club gift shop to get country club ball cap, (wedding out side under a brilliant sun, people from Great Britain, I will explain when I get there next month what Brilliant Sun is), catch a minute or two of the US Open in club house pro shop, return to wedding venue, after 15 minutes return to club pro shop to discuss the history of the country club and catch a few more minutes of the US Open, return to wedding venue, attend wedding, walk to the bar area for the pre-reception cocktails, head to pro shop to ask a question about the manufacturer of the hat I bought and catch a few minutes of the US Open, head back to pre-reception area, get another water (Not drinking to night), and get called into the reception ball room, head to bathroom farthest from ball room and nearest proshop, go Beau Hossler, what is that choking noise Tiger, back to reception, toast (with water) dance, dinner, speeches, dance, drink more water, watch people not drink water, use bathroom near pro shop, pro shop closed, #*^^%@, head home, clean up about 68 e-mails, read about Garage Band, work on new song on garage band, watch US Open Highlights, read book about gold investing, read American Association of Individual Investors, finish Barron's, read NYT book review magazine, bed time, sleep in till 8:00 and thank God I was drinking water, cup of tea, Lovely wife tells me to drink my tea while she hunts up breakfast, (am I dreaming?), Man Child wakes, we have a real breakfast, (chorizo wrap if you must ask), open too many gifts, (real good ones this year, that not so say I get bad one's, well sometimes . . . ), watch the teasers to the US Open, shower, office to get a few things for the trip to Utah, pick up Cusinart hand help blender for some recipes in Utah, drive home, move a few things for the painter who will be painting while we are gone, cut onions for tuna sandwiches, Linda and Dan (parents of the young man who got married on Saturday) came by to get their dog we were watching, sang Hawaiian Wedding Song acapella (unfulfilled request from the wedding the night before), Ryan and Kristin came by for Father's Day dinner, get more goodies, and everyone let me kinda watch the US Open, what was that choking noise Beau (Hey cut him some slack, he is 17 years old, goes to my son's high school by the way), had tuna sandwiches and pasta salad, (thank you dear), cleaned the kitchen so Devin could finish packing, (From the looks of the kitchen, you would have thought we made Beef Wellington, Yorkshire pudding and cherries jubilee, finally got to watch the end of the US Open, what was the choking noise Furyk, and now it is time to do the blog.
Hope all the Dad's had a great Father's Day. I know I got better than I deserve.
|
|
Now the real reason I wanted to post something tonight, is because I obviously got the call last week all wrong. Instead of down, it was up and with Friday's positive finish and the indexes up over 1%, we had had a true (but weak) follow through day. Technically that means we are in a confirmed uptrend.
That is why you see the Green Flag flying over there to the right.
As the IBD clearly states, we saw the NASDAQ fell through the 50 day moving average on May 3, and the DOW and S&P do the same on May 4. (We started flying the red flag on May 2.
In reading Alan Ableson's piece this weekend in Barron's, he confirms this looks like a rally, BUT (Behold the Underlying Truth) it does not look stable or strong. The IBD says much the same explain that some of the positive volume from Friday was the by product of option expirations closings.
So how do you play this possible rally? Here are few ideas. If you agree with the common wisdom that this little rally is a figment of hopeful quantitative easing to come, look at GLD, the Gold ETN. Gold speculators love it when governments print more money, and rumor has it that many central banks ore stocking up on the shiny stuff in case of all the promise of the G-20 do not come to fruition.
If you have been doing your homework and a few equities you think might be worth a play, you could ease into them. There are two way to ease into a position. Say you want to have XYZ company in your portfolio and you want 100 shares. Assuming you have an entry AND exit price, buy 20 shares on Monday, wait a couple of days to see what shakes out in Greece and what blah blah we get from the Fed and leaks from the G-20, and if you have not hit your 7-8% stop order, buy 20 more shares. Do that over the next few week and you will have you position locked in. The other way to do so is to look up how to sell put options. If your brokerage account is set up for options and margins, this is a great way to get into a stock you thing is going to go up. Let's say you like XYZ at 100 a share, but you are not sure what is going to happen, but want to play the recent rally (If that is what it turns out to be). Look at the put options for XYZ in say 60 ort 90 days at a strike price of $90.00. Lets say they are selling for 10.00. If you sell the put option for 10.00, it is an obligation to buy 100 shares of XYZ at 90.00 on the expirations date. If the stock goes up, like you are thinking, your options get more worth less and you can either buy back the options later at a cheaper price, or they expire worthless allowing you to keep the original premium you received, BUT (CAUTION) you have to buy 100 shares of XYZ at 90.00 a share. If XYZ is at 110 a share, you look like a genius, if XYZ tanks, you ain't looking so sharp, but it is a strategy.
I like this in a confirmed rally because it is kinda like going to Nordstrom's and seeing a cashmere sweater for 300.00 and telling them, I want to buy this for 280.00 and they pay me 20.00 to have the guarantee of selling me that sweater at 280.00 three months from now. I keep the 20.00, and have to buy the sweater and not worry about a price increase and hope they don't got on sale.
Salve Lucrum
| |
|
|
|
|
|
BAGAKOAA;
I am not a professional investment advisor. Anybody reading my blog and investing accordingly must be out of their minds. I have made more money than I have lost. There are many more qualified people than I to actually tell you how to invest your money.
BAGAKOAA=Boys And Girls And Kids Of All Ages
Salve Lucrum=Latin for Hurrah for Profit.
2012 Year Ending
Dow 13,073
S&P 500 1,358
|
|
Tool Box
Salvay And Lewcrum Explain
Market Direction | |
Blog
|
|
|
