Waiting for Clear Direction

No Trades this week. Markets are in some kind of turmoil. I am expecting a move downwards on this bearish bounce.

It would be better for overall market if SPX moves down to 1286 area (50 day Simple Moving Avg) to clear all the excess to start a new wave up.

Till market gives a clear signal, please hold on your bullets and preserve the ammo and health.

I will post in between if market gives a buy signal.

Gaddafi Hits

Finally Gaddafi hits the Markets. The Market Model is in confirmed Bear hands as per my models

Most of the positions stopped out at the last two days Lows.

The only positions I am holding is SGG which has a stop at 86.00 and held strong throughout the day.  May be commodities are not flinching..

ETF tracker updated.

https://spreadsheets.google.com/ccc?key=0AjnqAUXzNFr4dGlDeGtHWUcxY1haMWc4TWF0UmxFU3c&hl=en#gid=0

Meltup Continues and ETF picks for Week of Feb 21

Once again market it N has proven itself so strong, that every time there is some kind of weakness, there are buyers stepping in to boost and melt it up.

During last week, DAG's parent company announced that they no longer will support DAG as an ETF and will support it as a Closed end fund. Due to that many traders and investors, due to that the I was stopped out at my stop price.

Our top ETF picks last week and their weekly returns are as follows:

Top 5 ETF last week were

***********************************

ETF  Weekly gain

***********************************

1. FAS - 1.75%

2. DDM - 2.02%

3. EPI-  (0.06%)

4. DAG - (3.14)%

5. SOXL - 5.78%

--------------------------------------------

Cumulative return of 1.72%.

As I pointed out last week, VIX is trading near its low range. 

Even though market continues to be stong. I am still standing with one leg out of door.

A correction here would go long way towards making 2011 one of the solid years in the history.

This week's Top Picks Weekly ETF

TOP ETF for this upcoming week are as follows:

These are the top ETF to hold this week

1. FAS - Hold from last week

2. DDM - Hold from last week

3. EPI - Hold from last week

4. SOXL - Hold from last week.

5. SGG - Stop at 86.00

Instead of tracking these ETF on weekly basis. I am putting together a tracker to track these trades comprehensively.

Here is a link to this tracker.
https://spreadsheets.google.com/ccc?key=0AjnqAUXzNFr4dGlDeGtHWUcxY1haMWc4TWF0UmxFU3c&hl=en#gid=0

As this meltup continues, it is setting up for a exponential rise before it sharply reverses. Be sharp and on any sign of weakness be ready to dump everything back. Protect your profits and keeps  moving the stops if the positions move in your favor. 

One of the very very good books for Fundamental Investors.

Investment Valuation 2nd Edition University with Investment Set

What are Options

What is an Option?

An option is a derivative financial instrument that establishes a contract between two parties concerning the buying or selling of an asset at a fixed market price. The option will have some kind of underlying security that it is based upon like a stock or an ETF or an Index. 

Lingo in the Options World

Calls -  The contract  when purchased gives you RIGHT to buy (BUY to OPEN)

Puts - The contract when purchased gives you RIGHT to SELL (BUY TO OPEN)

Strike Price:  The price at which an underlying stock can be purchased or sold 

Expiration Date: The date till the contract is valid. 

From Wikipedia....

The basic trades of traded stock options (American style)

These trades are described from the point of view of a speculator. If they are combined with other positions, they can also be used in hedging. An option contract in US markets usually represents 100 shares of the underlying security.^[17]

[edit]Long call

Payoff from buying a call.

A trader who believes that a stock's price will increase might buy the right to purchase the stock (a call option) rather than just purchase the stock itself. He would have no obligation to buy the stock, only the right to do so until the expiration date. If the stock price at expiration is above the exercise price by more than the premium (price) paid, he will profit. If the stock price at expiration is lower than the exercise price, he will let the call contract expire worthless, and only lose the amount of the premium. A trader might buy the option instead of shares, because for the same amount of money, he can control (leverage) a much larger number of shares.

[edit]Long put

Payoff from buying a put.

A trader who believes that a stock's price will decrease can buy the right to sell the stock at a fixed price (a put option). He will be under no obligation to sell the stock, but has the right to do so until the expiration date. If the stock price at expiration is below the exercise price by more than the premium paid, he will profit. If the stock price at expiration is above the exercise price, he will let the put contract expire worthless and only lose the premium paid.

[edit]Short call

Payoff from writing a call.

A trader who believes that a stock price will decrease, can sell the stock short or instead sell, or "write," a call. The trader selling a call has an obligation to sell the stock to the call buyer at the buyer's option. If the stock price decreases, the short call position will make a profit in the amount of the premium. If the stock price increases over the exercise price by more than the amount of the premium, the short will lose money, with the potential loss unlimited.

[edit]Short put

Payoff from writing a put.

A trader who believes that a stock price will increase can buy the stock or instead sell a put. The trader selling a put has an obligation to buy the stock from the put buyer at the put buyer's option. If the stock price at expiration is above the exercise price, the short put position will make a profit in the amount of the premium. If the stock price at expiration is below the exercise price by more than the amount of the premium, the trader will lose money, with the potential loss being up to the full value of the stock. A benchmark index for the performance of a cash-secured short put option position is the CBOE S&P 500 PutWrite Index (ticker PUT).

[edit]

http://optioneducation.net/podcasts/spreads_02.wmv

DAG position Issue.

This is from Barrons.  I dont really understand what this really means to our DAG positions.

I will post more as I fully understand what happens behind the scenes on how this ETF will be tracking the Ag Index.

 

Deutsche Bank Suspends Issuance Of Double-Long Ag ETF

Posted by Murray Coleman This afternoon, Deutsche Bank (DB) said it had suspended issuance of the PowerShares DB Agriculture Double Long Exchange-Traded Notes (DAG). The firm has been trying to tweak its commodity ETNs for nearly two years to comply with a growing crackdown by regulators.
In late 2009, DB restructured some of its commodity ETNs after the Commodity Futures Trading Commission began setting “position limits” on how much any one fund could hold of a particular commodity.
The ETN, which acts and trades much like its sister exchange-traded funds except it represents notes issued by DB rather than shares, closed down 1.8% today. But DAG has gained more than 65% in the past 12-months as agricultural prices have shot higher.
The ETN also had some $145.5 million, according to Morningstar.
The move means that DAG will trade like a closed-end fund. While not mentioning the reason for the suspension, DB said in a statement: “daily repurchases at the option of holders of the notes will not be affected by this suspension, but the product will not be offered to new investors.”
A representative at DB refused further comment.

Weekly Review and ETF picks for Valentine Week

On Friday finally Mr.Mubarak gave up on his presidency and market liked that news.
The high flying DOW touching 12,273 and S&P coming close to 1330.
Also lots of companies this week provided the fireworks needed to run up and run down.

Some of my winners for this week are OPEN, CMG and PNRA. Other trades that I am still in SIMG, RVBD, LMLP. Also I bought today some of the Indian Banks, Icici Bank (IBN) and HDFC bank (HDB) in my retirement account.

Now since this market has proven itself so strong, that every time there is some kind of weakness, there are buyers stepping in to boost and melt it up.

Also another thing worth noting is VIX, the fear index. It is trading in the 15 range. If you look up the history.. you will understand why the saying still exist " When VIX is low go slow".

Even though we are at the cusp of the breaking towards up.. I am still standing with one leg out of door.

A correction here would go long way towards making 2011 one of the solid years in the history.

Weekly ETF

TOP ETF for this upcoming week are as follows:

These are the top ETF to hold this week

1. FAS - Stop at $ 31.95

2. DDM - Stop at $60.4

3. EPI- Stop at 21.73

4. DAG -  Stop at 15.71

5. SOXL - Stop at 66.6

We will track the returns of these ETFs on Saturday.

Open Option trades

This pictures explains how the options players lined up for OPEN over past couple of days before and after earnings..

February Meltup.. waiting for Snow to meltdown..

A long, long time ago…
I can still remember
How that music used to make me smile.
And I knew if I had my chance
That I could make those people dance
And, maybe, they’d be happy for a while.

But february made me shiver
With every blog I’d deliver.
Bad news on the doorstep;
I couldn’t take one more step.

I can’t remember if I cried
When I read about his widowed bride,
But something touched me deep inside
The day the music died.

So bye-bye, miss american pie.
Drove my chevy to the levee,
But the levee was dry.
And them good old boys were drinkin’ whiskey and rye
Singin’, “this’ll be the day that I die.
“this’ll be the day that I die.”

Oh, and there we were all in one place,
A generation lost in space
With no time left to start again.
So come on: jack be nimble, jack be quick!
Jack flash sat on a candlestick
Cause fire is the devil’s only friend.

…..and this last verse above could well translate like this

Oh, and there we were all in one place,…….No escape or exit route from a falling Indices

A generation lost in space …….Day Traders

With no time left to start again…..Margins Lost

and So come on: jack be nimble, jack be quick! ……Get Out Fast !

Jack flash sat on a candlestick ……Alas ! he was yet watching candlestick patterns on the Charts !

Cause fire is the devil’s only friend…..Got Burnt !

A Rebuttal

At first I was afraid
I was petrified
Kept thinking I could never live
without you by my side
But I spent so many nights
thinking how you did me wrong
I grew strong
I learned how to get along
and so you're back
from outer space
I just walked in to find you here
with that sad look upon your face
I should have changed that stupid lock
I should have made you leave your key
If I had known for just one second
you'd be back to bother me

Go on now go walk out the door
just turn around now
'cause you're not welcome anymore
weren't you the one who tried to hurt me with goodbye
you think I'd crumble
you think I'd lay down and die
Oh no, not I
I will survive
as long as i know how to love
I know I will stay alive
I've got all my life to live
I've got all my love to give
and I'll survive
I will survive

It took all the strength I had
not to fall apart
kept trying hard to mend
the pieces of my broken heart
and I spent oh so many nights
just feeling sorry for myself
I used to cry
But now I hold my head up high
and you see me
somebody new
I'm not that chained up little person
still in love with you
and so you felt like dropping in
and just expect me to be free
now I'm saving all my loving
for someone who's loving me

Go on now go walk out the door
just turn around now
'cause you're not welcome anymore
weren't you the one who tried to break me with goodbye
you think I'd crumble
you think I'd lay down and die
Oh no, not I
I will survive
as long as i know how to love
I know I'm still alive
I've got all my life to live
I've got all my love to give
and I'll survive
I will survive

Go on now go walk out the door
just turn around now
'cause you're not welcome anymore
weren't you the one who tried to break me with goodbye
you think I'd crumble
you think I'd lay down and die
Oh no, not I
I will survive
as long as i know how to love
I know I'm still alive
I've got all my life to live
I've got all my love to give
and I'll survive
I will survive