Archive for November, 2009

The DOW is continuing to rise as I had indicated it would from last week’s blog.  We are in an ascending broadening channel and the Index is currently printing a Hanging Man on decreasing volume that bodes for a possible short term slowing in the bounce.  We may go sideways for a session or two before resuming the move higher in the channel.  We need to break the swing high from 10/21 at 10119 to post a new high the recent trend.

The SPX is also moving higher an ascending broadening channel and also with a Spinning Top/ Hanging Man type pattern on decreasing volume that may indicate a temporary slowing of the recent bounce.  I feel that we will continue higher.  The index needs to break through the swing high from 10/21 at 1101 in order to post a higher high in the current trend.

The COMPQ is moving higher in the ascending channel and looks very bullish.  The index needs to break the recent swing high on 10/21 of 2190 in order to post a new high in the recent trend.  Click here and learn to read charts to profit.

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-The Long Combo, sometimes known as a Risk Reversal, is comprised of a lower strike Short Put and a higher strike Long Call.  The credit from the Short Put helps to pay for the debit of the Long Call.  As a result, the position can have very little if any debit.  The strategy simulates very closely the risk profile of Long Stock by for much less money.  It is a bullish position.  Study the risk graph and you should gain understanding of the risk and reward of the position.  Robin

ECONOMIC REPORTS

MONDAY 11/9

None

TUESDAY 11/10

None

WEDNESDAY 11/11

Crude Inventories

THURSDAY 11/12

 Initial Claims & Continuing Claims, Treasury Budget

FRIDAY 11/13

 Import/Export Prices, Trade Balance, Michigan Sentiment

 

 

EARNINGS OF NOTE

MONDAY 11/9

DISH, ETP, FLR, FUQI, MBI, PCLN, SLW, TSO

TUESDAY 11/10

 BZH, GOLD, TYC, WTW

WEDNESDAY 11/11

  AAP, AMAT, CSC, GMCR, ING, M, PGR

THURSDAY 11/12

KSS, JWN, WMT, DIS

FRIDAY 11/13

 ANF, A, JCP, T

 

I have noticed a tendency of traders to seek out trades using scans.  That can be an effective way to find trading ideas, however, I prefer to build a watch list of stocks and become intimately familiar with each stock in that watch list.

I know that each stock on my list is solid fundamentally and I am certain how the stock competes against others in its “space”.  The stock is usually “best of breed” and I know how it reacts at earnings and to other fixed news events.  I know if the stock has a habit of pre- announcing its earnings.  I am familiar with whether they typically make other important announcements at earning such as stock splits, buy backs or product releases.  I know whether forward guidance is usually understated or aggressive.

Stocks are like people in that when presented with outside events or circumstances, they will react in different ways.  Some will take challenging news in stride while others tend to overreact.  This gives me an edge over other traders who do not ‘know” the stock as I do.  Consider building a watch list and get to know your stocks.  I think you will find it to be well worth the time and effort.  Best, Robin