morekaos_IHB
New member
BlackVault CM said:
Interday doesn't count. Gotta close bellow
I THINK THE MARKETS HAVE BOTTOMED!!!
- Thread starter morekaos_IHB
- Start date
NEW -> Contingent Buyer Assistance Program
Interday doesn't count. Gotta close bellow
I'd do it sooner than later. I'm out completely in my short position, and started nibling on some long positions. I woudldn't push it for a few pts more unless you believe dow will go from -260 to -360 by days end (which can happen), thats why I'm being careful on my long positions. I'm leaning more towards buying calls, to place less capital at risk.
I swear if the market does rally...the man above is really giving me more blessings than I deserve.
damn... profits at 60% of what they were when I posted. I'm selling in 20min just the same
I'm proud of you skekker. Long-term, anything but US will probably be fine considering other countries don't really have a bankrupt SS and Medicare fund. That or I would even invest in companies that have global exposure and are cash rich. But EDD should do just fine for you.
One thing to keep in mind, and this doesn't just apply to EDD, it applies to anything with a dividend. Current US tax law calls for a 15% tax rate on dividend income. When the Bush tax cuts expire, dividend income will be regular taxable income. If you look at the charts of dividend paying stocks, they all started soaring in 2003 when this tax cut was put in place. The reason is simple, the dividend income is prized more highly by investors when they actually get to keep what they make.
At some point in the not too distant future, the reverse effect will take place. Dividends will be worth less to investors because they will get to keep less of the money, and you can expect a corresponding drop in value of dividend paying stocks. Though I could be wrong on my timing, I'd expect that change to being taking place around this time next year.
I know your a technicals guy, but from a fundemental prospective "sexy" isn't how I'd describe AA. I work in the same industry and we're stealing a lot of business from their Cleveland branch due to multi-million dollar maintenance issues as well as poor customer satisfaction (heard frequently from their customers). This is a trend I see continuing through this year. Also AA is a bit of a dollar strength play, seeing as how they lowered all their cost estimates this year because they feel a strong dollar will dramatically lower their costs in Brazil. If the dollar turns south this year, something like a $750MM cost will turn north.
Just the same, you prolly won't see any of this when ur in and out within a couple hours-days. For me, even if I am planning a very short term trade, I try to stick to only stocks that I believe are in a long term upward channel.
Appreciate it. Yeah, I was looking at AA as a quick trade since it has been beat up recently.
If I do decide to buy something long term, it will be fortified with puts allowing me to sleep at night.
Only long term prospects I would consider owning right now are Cisco and Exxon. On the "maybe" list, I would add Microsoft, Oracle and Wal-Mart. Pretty much cash rich companies that don't need to ask banks for capital.
Eitherway, your information is valuable. Thanks!
Another strategy I've been doing test trades on the past 2 weeks was looking at Put/Call volume on companies that report after closing or in the morning and look for unusual volume vs. open interest. I've noticed that stocks that have huge put volume miss their earnings estimate and drop the next day (about 90% of the time). So the play would be to pick up a few slightly out of the money puts or calls before the close depending on whether you are seeing huge call or put volumes.
USC,
I look at that indicator for short term trades, but honestly I don't make trades based on that alone. It hasn't worked out for me in the past, so I tend not to use it. I also never buy puts/calls on stocks reporting earnings unless I think they are going to suprise or disappoint far more than what the market or everybody else expects.
Options have a higher premium built in when upcoming events like earnings are coming. So for example. Cisco option could be selling for .50 cents on a normal month, but on a month that earnings are reporting it might be selling for .85 cents.
So the only way that .85 cent option contract can sustain its value is if the earnings move the stock 5% or higher (this is rough estimate). If the stock reports earnings where the stock barely moves up, stayes flat, or even declines, that option contract will instantly devalue the following day.
I used to trade like that when I first started, but to me they are just bets. If you're right, then you'll be wrong the next time. If you are wrong this time, you will be wrong next time. I've done it so many times that its beat into my head that it doesn't work.
I'll tell you what does work...selling calls before earnings. You will profit if the stock stays flat, opens up slightly, or opens lower. Odds are in your favor.
My strategy is that I invest when I'm 90% certain that the investment pans out. Meaning I'd have to have a strong movement down or up in the stock, the stochastics are lined up, MACD is lined up, upcoming company events favor me, upcoming global events favor me, call/put volume ratio, and of course the media. I want to have as many indicators in my favor as possible.
There are times that I'm very active in buying and selling options (last 3-4 months), but there are times where I can go a months without touching an option contract. If easy money isn't there...it just isn't there. I'll wait. I only need 1 move a year to make a handsome profit. I look everyday, but I don't act everyday.
I don't want to come across like I'm saying your idea won't work, because it can. I just never was able to do it myself. It could be my technique or my style, my timing etc. Maybe you can share with me what you will do a bit ahead of when you actually do it. So I can see your setup and see how it works.
Interday doesn't count. Gotta close bellow
usctrojanman29_IHB
New member
The day is young and the internals looks horrid....we close before 7400 today and around 785 on the S&P.morekaos said:
upperlowerclass_IHB
New member
hmmmm I'm smelling afternoon rally. I'm waiting til close to take profits
jbenko_IHB
New member
upperlowerclass said:
I'd do it sooner than later. I'm out completely in my short position, and started nibling on some long positions. I woudldn't push it for a few pts more unless you believe dow will go from -260 to -360 by days end (which can happen), thats why I'm being careful on my long positions. I'm leaning more towards buying calls, to place less capital at risk.
I swear if the market does rally...the man above is really giving me more blessings than I deserve.
upperlowerclass_IHB
New member
BlackVault CM said:
damn... profits at 60% of what they were when I posted. I'm selling in 20min just the same
jbenko_IHB
New member
This is gonna be a weak rally if there is one...the trend levels have broke and not sure we are going to have one. I'm buying 6 month out puts on the S&P to protect my position. I'm protected in case we have a -15-20% drop in the market as a whole. I just don't trust it.
O
Oscar_IHB
Guest
I think Reality has returned to the markets.
jbenko_IHB
New member
skek said:
I'm proud of you skekker. Long-term, anything but US will probably be fine considering other countries don't really have a bankrupt SS and Medicare fund. That or I would even invest in companies that have global exposure and are cash rich. But EDD should do just fine for you.
jbenko_IHB
New member
When the markets go south, its my way of saying F your stimulus package Obama!
jbenko_IHB
New member
Love it so far. Cisco is doing just fine and I hope it pops to 16-16.25 here in short term so I can sell some calls to lock in profits.
Alcoa is looking sexy, buy stock and sell 7.5 calls for a 20% potential return.
Alcoa is looking sexy, buy stock and sell 7.5 calls for a 20% potential return.
skek said:
One thing to keep in mind, and this doesn't just apply to EDD, it applies to anything with a dividend. Current US tax law calls for a 15% tax rate on dividend income. When the Bush tax cuts expire, dividend income will be regular taxable income. If you look at the charts of dividend paying stocks, they all started soaring in 2003 when this tax cut was put in place. The reason is simple, the dividend income is prized more highly by investors when they actually get to keep what they make.
At some point in the not too distant future, the reverse effect will take place. Dividends will be worth less to investors because they will get to keep less of the money, and you can expect a corresponding drop in value of dividend paying stocks. Though I could be wrong on my timing, I'd expect that change to being taking place around this time next year.
upperlowerclass_IHB
New member
BlackVault CM said:
I know your a technicals guy, but from a fundemental prospective "sexy" isn't how I'd describe AA. I work in the same industry and we're stealing a lot of business from their Cleveland branch due to multi-million dollar maintenance issues as well as poor customer satisfaction (heard frequently from their customers). This is a trend I see continuing through this year. Also AA is a bit of a dollar strength play, seeing as how they lowered all their cost estimates this year because they feel a strong dollar will dramatically lower their costs in Brazil. If the dollar turns south this year, something like a $750MM cost will turn north.
Just the same, you prolly won't see any of this when ur in and out within a couple hours-days. For me, even if I am planning a very short term trade, I try to stick to only stocks that I believe are in a long term upward channel.
jbenko_IHB
New member
upperlowerclass said:
Appreciate it. Yeah, I was looking at AA as a quick trade since it has been beat up recently.
If I do decide to buy something long term, it will be fortified with puts allowing me to sleep at night.
Only long term prospects I would consider owning right now are Cisco and Exxon. On the "maybe" list, I would add Microsoft, Oracle and Wal-Mart. Pretty much cash rich companies that don't need to ask banks for capital.
Eitherway, your information is valuable. Thanks!
usctrojanman29_IHB
New member
I short sold 500 shares of DE @ $33.55 earlier this morning. Also sold 100 uncovered Feb 6 BAC calls @ $.12 at the open.
usctrojanman29_IHB
New member
BV,BlackVault CM said:
Another strategy I've been doing test trades on the past 2 weeks was looking at Put/Call volume on companies that report after closing or in the morning and look for unusual volume vs. open interest. I've noticed that stocks that have huge put volume miss their earnings estimate and drop the next day (about 90% of the time). So the play would be to pick up a few slightly out of the money puts or calls before the close depending on whether you are seeing huge call or put volumes.
jbenko_IHB
New member
usctrojanman29 said:
USC,
I look at that indicator for short term trades, but honestly I don't make trades based on that alone. It hasn't worked out for me in the past, so I tend not to use it. I also never buy puts/calls on stocks reporting earnings unless I think they are going to suprise or disappoint far more than what the market or everybody else expects.
Options have a higher premium built in when upcoming events like earnings are coming. So for example. Cisco option could be selling for .50 cents on a normal month, but on a month that earnings are reporting it might be selling for .85 cents.
So the only way that .85 cent option contract can sustain its value is if the earnings move the stock 5% or higher (this is rough estimate). If the stock reports earnings where the stock barely moves up, stayes flat, or even declines, that option contract will instantly devalue the following day.
I used to trade like that when I first started, but to me they are just bets. If you're right, then you'll be wrong the next time. If you are wrong this time, you will be wrong next time. I've done it so many times that its beat into my head that it doesn't work.
I'll tell you what does work...selling calls before earnings. You will profit if the stock stays flat, opens up slightly, or opens lower. Odds are in your favor.
My strategy is that I invest when I'm 90% certain that the investment pans out. Meaning I'd have to have a strong movement down or up in the stock, the stochastics are lined up, MACD is lined up, upcoming company events favor me, upcoming global events favor me, call/put volume ratio, and of course the media. I want to have as many indicators in my favor as possible.
There are times that I'm very active in buying and selling options (last 3-4 months), but there are times where I can go a months without touching an option contract. If easy money isn't there...it just isn't there. I'll wait. I only need 1 move a year to make a handsome profit. I look everyday, but I don't act everyday.
I don't want to come across like I'm saying your idea won't work, because it can. I just never was able to do it myself. It could be my technique or my style, my timing etc. Maybe you can share with me what you will do a bit ahead of when you actually do it. So I can see your setup and see how it works.
jbenko_IHB
New member
My hand is itching to sell some calls...I just want a 200-300 pt pop before I do so.
usctrojanman29_IHB
New member
Sell some BAC Feb 5 calls...easy money and you'd have plenty of time to buy into the stock just in case there was a huge run-up.BlackVault CM said: