Wednesday, February 11, 2009

Back on Track

If you noticed my lines of support/resistance on the DJI30 from a few days ago, we indeed tested the bottom line of support, and the market appears to be bouncing back today as of this writing. The market appears to have recovered from what has been stated as an unclear stimulus layout, but what were people expecting? A step by step plan for recovery, or just a general"throw money at everything" approach? Who knows, but we seem to be correcting from an over-reaction to a not- so- clear event. I was so upset at the market's reaction yesterday that I actually didn't even know if I was going to watch today, but I couldn't resist.

Have a good one, Roger

Tuesday, February 10, 2009

I Was Taken to the Woodshed

I never dreamed there would be such an adverse reaction to a stimulus package being passed, but I was wrong. When I posted to sell LVS before earnings I should have been posting to dump everything you had before the stimulus went through. Then I realized something. The market has remained almost unchanged since the Dow bottomed at 7500 weeks ago, and people have played the impending final stimulus much like impending earnings releases; play the ride up then dump at the event.

Anyway, some of the trades I was in have now become a little bit of a longer investment then what I had originally planned. And there is no way I am going to touch my reserve bottom-buying cash to pick up some bargins at this point. At least not until I see if the Dow is going to ride back down to 7500. Albiet that's a worst case senario, but after the spanking today I'm not eager to play again until I see some recovery, and I am hoping that comes tomorrow. I'll be watching the early morning futures very closely.



Have a Good one, Roger

Monday, February 9, 2009

Playing the Earnings Game

This is one game I never did really like to play; Buying a stock just before
earnings, and then dumping it right before the release. Only one problem; if
earnings are a hit, then I miss a big gain and kick myself in the behind for
selling. But look at the reverse; earnings miss, and it takes a big dive
south. That's what stops are for, however, and I can't blame someone for
taking a chance. It's kind of like watching LVS. Many people had the same
idea as me and the stock gapped up at open from its previous close of 3.80
last Thursday to 4.24. In preparation for a pullback after the morning rush,
I placed a limit order of 4.10 that eventually filled. I was intent on
holding through earnings, but I got spooked over the preferred share thing
and dumped it today at 4.50 for a nice little 9% gain. Should I have held on
for another day in anticipation of another run on Tuesday? Perhaps, but when
I get "spooked" I go into capital preservation mode. I still will probably
establish a long term position after earnings, and these positions take on a
totally different character than a swing trade: you buy it , set a liberal
stop, and forget it. Don't forget it literally, just don't watch it every
tic of the days ahead. All in all, it looks like the DOW is hitting that
first line of resistance in the graph of my earlier post. There is so much
anticipation over the President's stimulus package that the tension is
almost a tangible substance pushing and squeezing my gut. Lovely feeling. I
have confidence that we are going to see a steady rise from here on, and
that trading will be a little more sane, if that is even possible.

Have a good one. Roger

Update on LVS

Some new information has come to light regarding LVS. The 2.50 dividend was
for the type of preferred stock that only the CEO's wife owns. This was very
deceptive, and I should have researched that better. Plus, jc pointed out
some interesting information regarding March calls that leads me to
recommend the following : Sell this stock before the Feb. 11th earnings
announcement. Take a nice gain as a swing trade, and then wait and see the
aftermath before loading up again. There is, generally, a run up in a
stock's price before earnings, so this might turn out to be a nice swing
trade anyway. But if you can turn 2 or 5 percent before tomorrow, I suggest
you sell. Sorry about that, but even the best of us get hoodwinked once in a
while, I just can't believe it happened to me. I guess I am human after all.
Have a good one, Roger

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