Market Review June 17, 2013

Well as it turns out, even though today was a bullish day, we are still stuck in that darn triangle.  We were close to breaking out, as we snuck above the triangle briefly, but we ended up closing below the line.  Notice that volume is still on the decline.  Note that I did not move any lines.  This triangle so far is being correctly predicted.  I also expect that when we do breakout, it is on relatively strong volume.  Here is a quick chart from today:

SPY_JUNE_17_2013

 

Review of Yesterdays Picks:

To make a long story short, nothing triggered from my predictions yesterday.  This is a good thing because we want confirmation of a trend and not get stuck in whipsaw action.  That leads me to my next section.

Real Life Trades:

FCX:  I am still in this stubborn stock.  My target is still 29.00 and my stop is still 30.35.  I thought once we closed below 30 we would continue to trade down, but unfortunately, we have just sort of meandered sideways.  If this thing hasn’t made a decision by the end of next week, I will make the “executive” decision to close out of my position.

VZ:  Yes, I know, just above I said that none of my picks triggered today.  That is 100% true, and yet I am in VZ and taking a HUGE beating.  Why?  Was it emotion?  Was it a knee-jerk reaction?  Nope!  It was a horribly, stupid, careless accident.  So what exactly happened?  I trade through TDAmeritrade and since I can’t be staring at the market all day, I like to set up trades the night before with conditional orders.  What I normally do is set everything up, (choosing the stock name, the options I’m going to purchse, type of order etc) except for the entry price.  I normally set the entry price to $1.00 on the condition that the order is LOWER than $1.00. Well last night when I was setting it up, I set it to be GREATER than $1.00 and I got triggered in right as the market opened.  Since I did not check my account until the the day (FCX wasn’t doing much so I expected zero activity), I wasn’t able to mitigate my loss.  Now I am sitting with a number of contracts down 25%.  How infuriating and frustrating!!  But now that it’s happened, what do I do?

Well here is what I plan on doing.  Tomorrow on open, if after 15min we are still trending downward, I will buy covering puts.  It looks like we could come back down to 49.50 so that would be my target on the puts.  All the while, I will still hold the calls and only sell them if we break below 49.50 at which point I will buy more puts.  I don’t think there is any easy solution to my problem here, unfortunately.  I never should have nor wanted to get into this trade, yet here I am.  It will be interesting to see if the market will forgive me tomorrow or make me suffer, but I sincerely hope that I can mitigate some of this loss.  Time will tell but I have to take this as a lesson to be much more attentive to my orders.  This is a terrible way to lose money.  Lesson learned!

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Market Overview for Friday June 14, 2013

Good evening everyone!  It looks like the market may have pulled a “gotcha” today.  We started out bullishly enough but as the day wore on, a slow sell off ensued.  With today’s candle, a clear triangle is being formed on $SPY (this is also true on $SPX and $DJIA and $DIA).  Which way this thing will break is anyone’s guess, but the oscillators MAY be giving a preview.  First, let’s look at volume.  It was very low today and generally has been decreasing ever since the pop from 5/22.  Oscillators are all bearish aside from stochastics which just crossed and are pointed upward.  Since the EMAs are getting tangled together, it may be possible that stochs iare giving an early indicator that the move will be bullish.  This is just speculation and absolutely not something we should be taking a trade based off of.  I think a trend will form once we break north of 165.40 or south of 159.72.

SPY_JUNE_14_2013

Real Trades:

I did not enter any trades today.  However, I am still holding FCX.  Why?  Well it’s due to dumb luck because I had intended to move my stop to $30.20 this morning, but when I checked my account I had never actually hit the “submit” button to confirm the trigger.  As a result I saved myself from getting stopped out too soon.  Looking at the chart again, I should have put my stop above the open from the candle on 6/11 if I was going to move it anywhere.  This is a good lesson learned for me on where to place my stops but to also be more careful when I enter trades and triggers on my broker account.  All that being said, I’m not crazy about this trade anymore.  I’d love for it to slide down to the low of 6/13 I’ll take a tiny profit and move on to the next trade.  For now, though I am going to place my stop at 30.35 and leave it at that.  FCX_JUNE_14_2013

 

Results from Yesterday’s Picks:

$COST would not have triggered.  $GOOG would not have triggered and $DE would not have triggered.  No action, but sometimes that’s how it goes.  Better not not get into a trade than violate your trade plan or get into an emotional trade.  Speaking of trade plans, while I have one in my head, it’s been brought to my attention that I should write it down.  I plan on writing up a page on this blog with my plan this weekend.  Stay tuned!

Enjoy your weekend, everyone.  I will be posting my picks for next week on Sunday afternoon/evening.

Market Recap June 12, 2013. Interesting Day!

What an interesting day on the street today (even if not all that surprising).  You’d think that the bears are completely in control right now, but I do not endorse that notion just yet.  Tomorrow is going to be a day (I hope) where a direction is chosen.  Aside from sideways, (which is always possible) we are either going to bounce off of this short term double bottom and resume the bullish run OR we are going to break through support (see $SPX chart below) and the bears will be in town.  I like a close below 1596 on the SPX for a confirmation of the bears.  Despite oscillators being bearish, my gut tells me that we are going to get a bounce, but my gut does not drive the market. Therefore, I will be waiting and watching patiently to see what the market decides to do.SPX_JUNE_12_2013

Real Positions:

I got crushed on HD; stopped out for a 10% loss.  This is incredibly disappointing because I was up 26% on Monday and did not take profits even though my target was reached.  The market looked like it was off to a strong start so I just let it go.  Then on Tuesday I had a chance to take a 15% return, but refused because I wanted to get back to 26% and again today I had a chance for a 10% return but refused which ultimately landed me with a 10% loss.  Very disappointing, but a very good lesson learned:  Stick to your trading plan and take profits at your target or worse case, move your stop up to your target if you are over.  Learning when to let my profits run and when to take profits is a struggle for me right now, but I’m sure it is something I will develop as I grow and gain more knowledge and experience.

That being said, my $FCX trade triggered today.  I bought 3 August calls, of which I plan to sell (or at least move my stop) at $29.00 for a quick profit.  I will not play around with this trade like I did with $HD.

Let’s look at my picks from yesterday:

$Z would have been an excellent entry after 15min. You may still still be holding and trade down to the 100 MA

$GS short would have been excellent as well

$AXP Ditto

$SLV you would not have gotten triggered in because it was not below the entry price

$CAT you also would not have gotten triggered

$LNKD would not have triggered.  In addition, notice how we stopped right above the 100 MA.  It will be interesting to see if we bounce or keep on going down.

$FCX You would have gotten triggered in.  Let’s see how this trade plays out.

$PHM would really have been your call on getting in or not.  Waiting for a close below support would be the best idea, though.

Picks for tomorrow coming soon!