Sold 4000 of the 5000 shares of CHOP I was holding according to my stock market system that I use.
Rebought NEP in the trading account for 3000 shares at 9.04 and started buying CCME here at these prices. Gotta put that capital to work.
Here is the amazing thing about LIWA, we bought at 8-8.40 and it runs all the way to $10. This was based using our stock market system that I sell on here for a minimal $299 and $399 which we will make back almost immediately. Once you sell on our strategy with a massive return it runs all the way back down to $9!!!!!! So we might have a chance to buy in the 8’s again. The rule is never to chase but take your gains, and maybe just maybe let a small amount ride. In these small cap stocks without un-sustained volume they tend to run right back down to cheap prices. Hopefully you are learning and earning at the same time!
Please email me back with your Profits and Losses for encouragement!
Here is a market update:
Greece’s long-awaited austerity plan wasn’t enough for participants to forget about the fiscal troubles that still face the likes of Spain and Portugal. That left the stock market unable to sustain solid, broad-based gains… Led by the materials sector, stocks made their way to fresh one-month highs. The materials sector had been up as much as 2.0% before it saw that gain cut in half. Still, materials saw the best gain of any major sector as a combination of momentum and a weaker dollar provided it with support… Weakness in the greenback came as the euro and British pound rebounded from recent losses, which were frequently attributed to the fiscal woes that face the likes of Greece, Portugal, and Spain… Greece attempted to quell concern over its fiscal health with the release of a new austerity plan that includes civil service salary cuts and a sales tax increase. Despite such plans, problems persist for Portugal and Spain. That reality caused Europe’s major bourses to show little initial reaction to Greece’s plans, but the continent’s major averages gradually pushed higher to log strong gains… U.S. equities were unable to mimic the move. The Dow, Nasdaq Composite, and S&P 500 each added modestly to the previous session’s gains, but eventually rolled over. That left the stock market to finish flat after three straight gains… The afternoon slide left the S&P 500 below the 1125 line, which many traders believe could act as a springboard for further gains if the stock market closes above it… Economic data received little attention this session. That’s essentially because participants remain cautious ahead of the official nonfarm payrolls number on Friday. Cautious trade also led to light trading volume, which failed to surpass 1 billion shares on the NYSE… A glimpse into the payrolls report was given with the February ADP Employment Change Report, which indicated that 20,000 private payrolls were shed last month. The number was in-line with expectations and the smallest decline in one year… Meanwhile, the ISM Services Index for February came in at 53.0, which was above the reading of 51.0 that had been widely expected and marked the highest reading since October 2007… The Fed’s Beige Book, which is largely full of anecdotal economic news, came with little surprise. It indicated that nine of the 12 Fed districts reported modest improvement in economic activity during February, while consumer spending improved slightly in many districts… Commodities had a strong session that pushed the CRB Commodity Index back above its 50-day moving average. Oil futures prices closed 1.5% higher at $80.87 per barrel, despite a larger-than-expected weekly inventory build of 4.03 million barrels. Silver had another strong session and closed with a 1.6% gain at $17.33 per ounce. Dow -0.1%, Nasdaq unch., S&P 500 unch.
Regards
Ben Brinneman
Great article from finance yahoo.com
By Josh Funk, AP Business Writer , On Saturday February 27, 2010, 2:49 pm
OMAHA, Neb. (AP) — Berkshire Hathaway Inc.’s fourth-quarter profit bounced back sharply, thanks largely to an unrealized $1 billion gain on derivative contracts and investments.
Warren Buffett’s company said Saturday that its insurance and utility divisions performed well enough to help offset weakness in subsidiaries hurt most by the weak economy, such as NetJets, Acme Brick and other manufacturing and retail businesses.
Berkshire generated $3.056 billion in net income, or $1,969 per Class A share, during the quarter. That’s up from $117 million net income, or $76 per share, a year ago.
The three analysts surveyed by Thomson Reuters had expected Berkshire to report fourth-quarter earnings per share of $1,208.33 on average.
Berkshire said it generated $30.2 billion revenue in the fourth quarter. That is nearly 23 percent higher than last year’s fourth quarter revenue of $24.6 billion.
A year ago, largely unrealized losses of $3.3 billion from Berkshire’s investments and long-term derivative contracts weighed heavily on the Omaha-based company’s fourth quarter profit. But the value of the company’s investments and derivatives, some of which are tied to the value of stock market indexes, was significantly higher at the end of 2009 and added a $1.03 billion gain.
Buffett reiterated Saturday that he believes the derivatives will be profitable over their lifetime, partly because Berkshire held about $6.3 billion in derivative premiums at year end that it can invest.
Berkshire released its annual report along with Buffett’s letter to shareholders Saturday. The company describes the performance of its subsidiaries throughout 2009 in those reports, but doesn’t break out detailed information about the fourth quarter alone.
Buffett said Berkshire’s insurance unit, which includes Geico and reinsurance giant General Re, remains the “engine behind Berkshire’s growth” because the insurance companies give the company money to invest at little or no cost from premiums it holds until claims must be paid. That money, called float, grew to $62 billion at the end of 2009.
Buffett said Geico had 8.1 percent of the auto insurance market in 2009, but the company’s growth may slow this year because of slumping vehicle sales and high unemployment.
Berkshire’s insurance businesses generated $1.01 billion in net income from underwriting in 2009, down from $1.7 billion last year. But the investment income in the insurance division grew to $4.1 billion in 2009 from last year’s $3.5 billion.
Berkshire’s utility division, which includes MidAmerican Energy Holdings Co. and PacifiCorp, added $1.07 billion net income during 2009, down from $1.7 billion in 2008.
In future quarters, Berkshire’s utility division will include its newest subsidiary, Burlington Northern Santa Fe railroad. Buffett said the railroad’s results and capital-intensive business are similar to a utility, so it made sense to put BNSF with Berkshire’s utilities.
The manufacturing, service and retail unit at Berkshire generated less than half the profit it did the previous year. Those businesses generated $1.1 billion in net income in 2009, down from $2.3 billion the year before.
Those businesses suffered because of the recession last year, and many of them, such as Acme Brick and Shaw Carpet, are tied to construction.
“These businesses continue to bump along the bottom, though their competitive positions remain undented,” Buffett said.
Berkshire owns roughly 80 subsidiaries, including clothing, furniture, jewelry and corporate jet firms, but its insurance and utility businesses typically account for more than half of the company’s revenue. It also has major investments in such companies as Coca-Cola Co. and Wells Fargo & Co.
Berkshire Hathaway Inc.: http://www.berkshirehathaway.com
The first thing I want to start with is the watch-list below is what I watch everyday. That hasn’t changed. I will run through exactly what I am thinking with some of the stocks on this list. The only thing that hasn’t changed is the market. It continues to be super boring and flat. In times like this you can easily think you can force a trade and earn some easy cash SOMEWHERE. It is quite the opposite you have to wait for the trade to come to you. So be thinking about patience and keeping your cash ready when there are some good buying opportunities. In my long-term account things are dribbling down but I don;t care they shouldn’t be down here. LIWA CHOP CHBT NEP etc. I explain below.
DIA SPY QQQQ SMH AAPL AFAM AGM AMED AMZN ATVI BAC CBAK CCME CHBT CHL CHOP CLDX CREE EGMI F GAXC GGWPQ GNW GS HEAT LIWA NEP HIG LNC MIC NFP MOS POT SEED FEED RINO TRIT TSTC NFP SYNM TIE X
Starting with the indices…
The indices are sitting at the 50 day support/resistance. Wavering Wavering. Boring.
CLDX is the only thing on my list that has started to move significantly to the upside. This was my latest trade idea that generated right at 20% so far and I believe still has some upside to it. I will update if I see anything on it that would change its story, but so far so good.
GNW hit new 52 week highs today, lots of strength, but could be a great short with our stock market system as it has hit some resistance. Watch it.
BAC looking strong
CBAK I bought this at 2.43 according to our stock market system and sold at 2.43 no upward movement so I decided to put my capital where it would work.
CHL long the june 52.50 calls
EGMI is halted and now a worthless stock because of a possible fraud within the company.
(Here are the current numbers which are accessible to anyone. Unless the company hired a chef instead of a CFO right from the get-go these should have been accurate.
- They have 12m+ in the bank
- They have a debt / equity ratio of 0%. In other words they have no debt
- Their return on sales is roughly 46%
- Their return on equity is over 35%
Whatever the case, there has long been a struggle for power at EGMI, I’m not sure of the exact details, but I imagine that the board & management are at odds based on the lack of execution over the last few months. I think this power struggle lead up to the events of last week.
I believe there is a chance that they do have the 12m cash that they always claimed to have. We have no choice but to wait, and hope that there is something brewing internally and we’ll hear all about it next week before the stock re-opens. Whatever the case, even if they have a glowing story and “it was all just a big misunderstanding” the stock will likely drop before it moves back up. Borrowed from Bullsonwallstreet.com)
NEP is riding up with Oil and has found its trading range here in the upper 9’s, on a dip, will be a great buy again and again. With our stock market system we nailed NEP at 7.86!
GAXC I keep a peripheral eye on this anything under .90 cents Ill start accumulating it again.
LIWA is so cheap right now thats all i have to say (buy buy buy)
CHOP has no volume but wait till some fund sees it true potential and starts to buy it. IFLG is a good example of what could happen in one day to these equities that are super undervalued.
CREE Looking to buy the calls once it dips 2-4 bucks will let you know.
TSTC I mentioned at 10 now at 20 and some change. This has some really good volatility but I have yet to purchase any shares and try it for a swing trade or investment. Great company. Strong company.
MARKET UPDATE:
Stocks rolled over in the final few minutes of trade to log their first loss in five sessions. The downturn came after the stock market failed to extend a move that took it from a modest loss back to its opening high… Financials were integral in the afternoon advance. The sector was a steady outperformer for the entire session and finished with a 1.1% loss, despite a lack of clear catalysts within the sector. While the broader market inevitably failed to follow the financial sector to a gain, its strength helped limit losses… Technical support at the S&P 500’s 50-day moving average also provided support. The line acted as a floor for trade during the entire session. It even held firm as stocks extended their opening slide into negative territory amid news that President Obama has proposed to broaden the Medicare Hospital Insurance tax base in his latest health care reform plan. Despite the negative reaction to the news item, health care stocks finished fractionally lower… Energy stocks were the worst performers. They shed 1.3%. Schlumberger (SLB 61.57, -2.33) was a primary laggard following news that it has agreed to a stock-for-stock merger with Smith International (SII 41.03, +3.33)… In other merger and acquisition news, Thermo Fisher Scientific (TMO 48.10, -1.12) has made a $6 billion bid for Millipore (MIL 87.35, +16.01)… Treasuries traded in quiet fashion this session. Results from an $8 billion auction of 30-year TIPS did little to stimulate interest in the space. As such, the benchmark 10-year Note finished just a few ticks lower… The dollar also traded quietly along the flat line. Its movements had little overall effect on the broader market… Trading volume was paltry once again as fewer than 1 billion shares traded hands on the NYSE. Dow -0.2%, Nasdaq -0.1%, S&P 500 -0.1%, Nasdaq 100 -0.3%, S&P 400 unch., Russell 2000 +0.1%
Until next time;
HAPPY TRADING!
the C² Trading Team
Visit C² Trading at http://csquaredtrading.com
The C-Squared STOCK ALERT Service is solely an educational information service. The information is not intended as investment advice, as an offer or solicitation of an offer to sell or buy or as an endorsement, recommendation or sponsorship of any company, security, or fund.
C² Trading, its founders, its licensors, content providers, employees, officers and directors (hereinafter referred to as The Company) does not warrant that the information contained in the Service is accurate or complete. The Company is not responsible and does not guarantee that the information contained herein or distributed from this site will be uninterrupted or error-free, or that defects will be corrected, or be liable for any errors or omissions that may be found in such information or for the results obtained from the use of such information. Subscribers and users of the service contained herein or distributed from this site (CSquaredTrading.com) are encouraged to consult other sources and confirm the information contained within the Service. Subscribers and users of the service understands and agrees that the Service should only be used as one of several research tools and that subscribers and users of the free service should consult with a stock broker or other investment professional prior to making any material investment decision. Both long-term trading, position trading and intraday-trading have potential rewards, as well as large potential risks. Trading may not be suitable for all users of this site or the information provided by this service. Subscribers and users of the service assume the entire cost and risk of any trading they choose to undertake. Any reproduction, re-transmission or redistribution of any information, provided by CSquaredTrading.com is strictly prohibited.
The first thing I want to open this email with is a congrats to several of the traders that have followed their rules to make small and large profits here and there this last week. Some of you have lost some and some of you have earned some. This week was a slow week for everyone. LIWA and CLDX were the only ones on my radar that finally moved in my favor at either end of last week.
This coming week I am going to be much more aggressive in my trading. I am currently up 10% for the month of February and 20% for the month of January. My stock market system is simply a strategy that takes a lot of real time practice as you work towards learning to become a full time trader.
I wanted to quote some Think and Grow Rich by Napoleon Hill. Out of his 31 major causes of failure, I will quote one of my favorites.
Lack of a well-defined purpose in life.
There is no hope of success for the person who does not have a central purpose or definite goal at which to aim. Ninety-eight out of every hundred of those whom I have analyzed had no such aim. Perhaps this was the major cause of their failure.
This makes me ponder what is my goal in investing and trading? What are my financial goals? What are my life goals, and where can I help others. Where can I fulfill my goals and help others in living a more productive life and be more efficient at their daily tasks.
Think of some of your own daily trading and long-term investing goals, write them down, pursue them and you will succeed.
Here is a link http://www.finviz.com/quote.ashx?t=nep,gnw,mic,x,cree
to see what a stock does when it hits new highs, it generally gains momentum and goes higher.
NEP above 6 and goes and almost doubles.
GNW anything above 13.68 and then 15.20, it went higher and higher.
CREE just hit new highs should continue much higher.
X just turning around moving higher and wants to fill that gap. WATCH out above.
Market Summary
The Fed’s decision to hike the discount rate after the prior session’s close stirred market participants to dump stocks in pursuit of the dollar, but the dollar inevitably drifted lower and stocks managed to recover and finish the week with their fourth straight gain… Given that the Fed’s decision to lift the discount rate to 0.75% from 0.50% marked the first rate hike in one year, participants panicked a bit and made a knee-jerk decision to sell stocks. The announcement shouldn’t have come as a complete surprise, though. After all, Fed Chairman gave market participants a clue during his recent testimony before the House Financial Services Committee that a modest increase in the spread between the discount rate and the target federal funds rate was expected before long… Still, to help quell concern about what may be in store, the Fed expressed that its decision was not a signal for any change in the economy or monetary policy. Several Fed officials made similar, separate comments of their own about how to interpret the move, but many seemed to ignore the notion that the increased discount rate was a tacit sign that the financial system is back on firmer footing… In conjunction with the announcement the dollar was pushed higher, such that the Dollar Index climbed as much as 0.5% to new multimonth highs and even broke through a key technical resistance level that restrained its gain in the previous session. However, the greenback eventually rolled over and finished at a session low with a 0.5% loss against a basket of foreign currencies… A softer-than-expected inflationary reading played a hand in the dollar’s downturn. The Consumer Price Index (CPI) for January made a 0.2% monthly gain, which was slightly below the 0.3% increase that had been widely expected. Excluding food and energy, consumer prices for January actually slipped 0.1% month-over-month, instead of the 0.1% monthly increase that economists had forecast… As the dollar surrendered its gain, stocks were able to regroup and make a broad-based bounce to positive territory. The move took the S&P 500 above its 50-day moving average to a one-month high, but buyers didn’t step in at the higher price points to help stocks extend the move into something more meaningful. As a result, stocks traded with choppy action into the close and left the stock market to settle with a modest gain, in-line with its 50-day moving average. Still, that was enough to give the stock market its fourth straight advance and a weekly gain of more than 3% — its best weekly performance in three months. Dow +0.1%, Nasdaq +0.1%, S&P 500 +0.2%, Nasdaq 100 unch., S&P 400 +0.5%, Russell 2000 +0.4%
Have a great weekend.
Ben Brinneman
This market has been so boring, it seems that it is dribbling away my profits. Oh well can’t force a trade. I have been reviewing a few of my trades and everything is on track and I am following my rules. Ceteris Paribus (all things held constant) I should be fine when the positions move in my favor.
I continue to be cautious and see where I can join the momentum play but really havent seen anything significant lately. I did purchase some SEED to see if they would move in my favor over a buyout interest from several investors.
I alsop purchased 3000 shares of CHOP today for another trade and we shall see is what I wrote next to my description of why I traded it.
There are some signs that the economy is recovering but things are still in the pooper. The Philadelphia Fed Business Outlook increased from 15.2 to 17.6 in February. The consensus expected the index to increase to 17.0. The index has remained positive for seven consecutive months and signals further growth in manufacturing. The details of the report were strong. Growth spiked in new orders as the index increased from 3.2 to 22.7. Shipments increased from 11.0 to 19.7. The increase in shipments, however, was mostly due to the filling of old orders as the unfilled orders index declined from 3.6 to -7.5. Inventories posted the first positive month since September 2007. The increase is in-line with the Q4 aggregate manufacturer inventories data.
I will continue to trade and train my subscribers on how to buy and sell securities in a timely and profitable fashion. I am also learning more strategies to put together and to show others how to endeavor in this weird, boring, id rather “watch paint dry” market
The question that runs through many Traders, Investors, and Fund Managers minds lately has been “Where is the market going”? The reason for ever-ones curiosity is to have a better sense of what to do with their current investments or sideline cash. If you are unsure about what to do, cash is sure. Meanwhile all the Super-Stars, Celebrities, Money-Managers, and Hedge Fund Managers are sitting around counting their shillings while the little guys suffer and feel they have missed the rally or they didn’t seize a certain opportunity at some point in the last six to eight months. I would like to point out a few items via charting examples in order to have a better sense of where the market will potentially head. Then I will delve into some simple fundamental statements about the economy. Mark Twain said that the markets don’t repeat themselves but that they rhyme. I want to demonstrate that by taking us way back to the great depression and doing a comparison/contrast of what the charts looked like in that time period and what they look like today that this will give us a good indication of what the markets may do starting in January.
Near the bottom of this article is the Comparison CHART[ad]
The areas that are circled are the comparisons, see how they match each other in a similar way. One main difference is that the plunging of our sell-off didn’t start until about one year into the bear market whereas in the Great Crash it happened almost overnight. Either way we have declined about the same percentage amount. If the rest plays out to match the 1930’s we could see the Dow 2000’s. I hope that never happens but the reality is that we are in a really bad economy not just in the United States but globally speaking! This makes the market a traders market and a great place to learn to trade and profit from the volatility.
Like any sports star that took years to figure out how to bat the ball, make a 3 point shot, or kick a field goal, trading and investing also takes a hundreds of hours of practice. The sports industry has produced a number of successful traders and investors. To name one, Pete Najarian, the Pit Boss, is ranked one of the top 100 traders by Trader Monthly magazine, is co-founder of optionMONSTER.com, a news and information site for options traders. Following a football career that included several seasons with the NFL’s Tampa Bay Buccaneers and Minnesota Vikings, Najarian took up options trading in 1992 joining his brother, Jon ‘DRJ’ Najarian, at Mercury Trading, a market-making firm at the Chicago Board Options Exchange (CBOE). Two years later, he assumed responsibility for Mercury’s risk and arbitrage and later led its entry onto the New York Stock Exchange (NYSE). (quoted from http://www.cnbc.com/id/18945714)
There are others that failed at the game. Lenny Dykstra being one of them. Dykstra played for the New York Mets during the late 1980s before playing for the Philadelphia Phillies during the early 1990s. He threw and batted left-handed and played primarily as a leadoff hitter. (quoted from http://en.wikipedia.org/wiki/Lenny_Dykstra) In August 2009, Dykstra was living out of his car and in hotel lobbies. He owes more than $30 million to investors of which he lost all their money in the market crash of 2008 and beginning of 2009.
One strategy that is used by traders to avoid catastrophe in unknown waters is one that I will describe below. This is not a majeur force strategy just a way to earn some income in the markets while being indecisive about going all in with your sideline cash and investing for the long haul. Until all this mess with the economy blows over , you will want to wait for big-sell-offs of various equities especially in the over-bought emerging markets such as China. Currently there has been a large sell-off in Chinese ADR’s listed on the american markets and they have presented some good buying opportunites fundamentally (numbers) and technically (charts) speaking.
Below is a written out version of part of my strategy which works extremely well in this market.
These companies that I have researched, traded, and invested in have been outperforming the market on a day-to-day basis. Even when the U.S. markets are down, my account will remain flat or even go up because of the resilience of these companies. Many of these equities have a “low float” (a low number of shares outstanding), precluding that whenever a flood of buying occurs, the stock soars or vice versa the stock tanks on selling, a lot faster than an equity with a large number of shares outstanding, such as existing U.S. companies that are listed.
Value-Growth Chinese companies are relatively undiscovered, and once investors realize what potential future growth they have, they will be drooling at their low PEs and beautiful fundamentals and piling in. I would be cautiously optimistic allocating only 35% of my portfolio in China.
I have a dynamic watch list, 13 trading rules, and a training video that I give out for free at www.csquaredtrading.com, but the most important part is the strategy that I have developed with a partner over the last ten years in order to trade in and out of these volatile and uncertain markets accurately. Without this, you fellow trader and investor, are merely shooting in the dark like a midnight cowboy as you trade. Even if you are investing, this will help you create a margin of safety on your purchases. This is where a sports fanatic can relate as it ties in to having an edge in what you do. Has somebody ever covered a topic or a problem and never handed out a possible solution? Well I have outlined just a few things below to keep in mind when purchasing or selling a stock.
A million-dollar-banker buddy of mine used to purchase stocks he liked at whatever price. Now he calls me to verify a good entry point on a company that he loves! The strategy is named the Triple-Whammy Trading Technique. Below is a description of a piece of the puzzle and how it works. (Remember there are many other moving parts to the market and this is just part of the many tools required) You may need to do a bit of research to figure out what some of these words below mean.
(Important Note: The Triple-Whammy Trading Technique only works well if the direction of the Bollinger Bands is primarily from left-to-right, rather than primarily up or down)
Set up your chart: Make your chart-settings as follows:
(1) Time Period: For day trading, 30 minutes or one hour; for swing trading, 3 days or longer
(2) Chart Style: Candlestick
(3) Chart Frequency: For day trading, one minute; for swing trading, 10, 15, or 30 minutes
(4) Upper Indicators: EMA (9 period) and Bollinger Bands (20 period)
(5) Lower Indicators: MACD (12, 26) and RSI (14)
Now you’re ready to proceed.. There are three essential components of this set-up:
For quick profits with a Triple-Whammy Perfect buy (Buy-Low-then-Sell-High; or Buy-to-Cover Short-Sell), these three legs are as follows:
(1) The candlesticks will violate the lower Bollinger Band.
(2) RSI must fall into oversold territory, under 30, and preferably in deeply oversold territory, under 20.
(3) The MACD (blue) line must be under the signal (red) line, and falling; and then must turn back upwards and cross the signal line. The crossover is the final confirmation — but if the turn upward is sharp enough, you know it’s getting ready to do a crossover, so it’s best to go ahead and act, if the prior two conditions are already in place.
For quick profits with a Triple-Whammy Perfect sell (ShortSell-High-then-Buy-Low; or Sell-to-Close Long Position), these same three legs are as follows:
(1) The candlesticks will violate the upper Bollinger Band.
(2) RSI must rise into overbought territory, over 70, and preferably in steeply overbought territory, over 80.
(3) The MACD (blue) line must be above the signal (red) line, and rising; and then must turn back downwards and cross the signal line. The crossover is the final confirmation.
This strategy is available as well as an additional advanced strategy that we just put together called the VWAP Support Swing Setup. Both of these strategies will greatly enhance your trading right away by informing you of the trading ranges that you are in and how to enter and exit your trades. There are other various disciplines for learning how to participate in the market, however I would have to write a book and not an article to cover those points.
As time goes on you will notice the shift into other emerging markets and you will wonder how come I did not participate? You will eventually be able to correctly identify these companies with a little bit of research and some technical analysis, and not only that, but make a brilliant entry into the equity/investment. Buffet even mentions entry, or margin of safety as a critical part to his investment thesis.
Another item to mention is that the market never discounts the same thing twice. In other words the news that is currently out has already been priced into the market. It would take a major bank failure to really crack this market lower (my vote is C Citigroup Bank). If this happened then everyone would start selling on the news and grabbing profits from the last six to eight months where they have just ridden the upward wave. GDP was positive 5.7% but most of that number came from an increase in businesses buying to re-stock their low inventory. This does not mean customers are flocking to their stores and purchasing. Consumer spending is still weak (except in China and Brazil).
A discovery for Alzheimers or Leukemia could be in the making for this year strengthening the bio-tech sector as a relatively good sector to be involved with.
Financial reform is in order for 2010, stagnating bank growth for the next year or two. However, whenever bank reform is in the air the powerful boys of Wall Street will create new financial vehicles to earn more and more money. Where do you think Private Equity, Hedge Funds, and Bundled Securites came from? Historical bank reform leads to present investment vehicle modifications.
With all this said I want to summarize by saying we need to remain cautiously optimistic about where we invest our cash into these precarious markets. If we do get a pull back to those Great Depression like lows, it will be a good time to hedge your portfolio with some short sales, and book profits from the recent March Lows meanwhile keeping your money at work trading and investing following a specific set of rules. Continue practicing no matter what happens whether that be in sports, life or the trading and investing.
Here is the chart.
Bear Market Chart Comparison
Until next time;
HAPPY TRADING and INVESTING!
the C² Trading Team
Visit C² Trading at http://www.csquaredtrading.com
The C-Squared STOCK ALERT Service is solely an educational information service. The information is not intended as investment advice, as an offer or solicitation of an offer to sell or buy or as an endorsement, recommendation or sponsorship of any company, security, or fund.
C² Trading, its founders, its licensors, content providers, employees, officers and directors (hereinafter referred to as The Company) does not warrant that the information contained in the Service is accurate or complete. The Company is not responsible and does not guarantee that the information contained herein or distributed from this site will be uninterrupted or error-free, or that defects will be corrected, or be liable for any errors or omissions that may be found in such information or for the results obtained from the use of such information. Subscribers and users of the service contained herein or distributed from this site (CSquaredTrading.com) are encouraged to consult other sources and confirm the information contained within the Service. Subscribers and users of the service understands and agrees that the Service should only be used as one of several research tools and that subscribers and users of the free service should consult with a stock broker or other investment professional prior to making any material investment decision. Both long-term trading, position trading and intraday-trading have potential rewards, as well as large potential risks. Trading may not be suitable for all users of this site or the information provided by this service. Subscribers and users of the service assume the entire cost and risk of any trading they choose to undertake. Any reproduction, re-transmission or redistribution of any information, provided by CSquaredTrading.com is strictly prohibited.
The banks are not stupid, I guarantee they have been waiting for a day such as this to come. I am pretty sure the reason that hedge funds, prop trading, and private equity groups are around are because of “Bank Regulation Rules” that forced them to start these different sorts of investment vehicles. These vehicles allow them to bend the rules that the Hill puts on them.
I totally disagree that in the long-run this will hurt them. This should help them come up with other creative methods of banking and therefore win again and again for the shareholders. There is no need to worry, however… With the market at these levels I refuse to go all in on the long-side again. I will wait and short the market and see what happens. I have turned bullish to bearish and until the market continues its march upwards I will remain bearish.
I still have a few long positions that I am in CHOP ZAGG GAXC.OB and MPEL all these are still trading under book value and should increase in significant value as time goes on.
Today there are a ton of great buying opportunities! www.csquaredtrading.com
Ten years ago on a sunny afternoon, I walked in into my advisors office. The rich, plush, leather chairs invited me to sit down. He greeted me with a warm smile and a firm handshake and asked how he could help me as he adjusted his $70 tie. I plopped my checkbook on the table and proceeded to tell him that I wanted my money to grow, that I wanted to “invest in the markets”. He gladly told me that he had some financial investment vehicles that he could show me to make that money grow. Since I was young he told me the best scenario was to go aggressive with my investments.
You have heard of this scenario a thousand times, and may have gone through the same process in your life with your advisor or broker. He started with a spreadsheet about how if I invested by the time I was 30 my account would grow by 50%-60% and that every year after that it would grow exponentially. Told me by the time I was 60 the account value would be in the millions! I am 26 and ten years later that money is now in the red. Let me break this down. If Joe Advisor had not collected an advisor fee every year my account would be positive by 9%. Since he collected his fee every year and paid himself off of my account and others, it chipped away at the performance of that account. My cash not only sat in those investments collecting dust, but also were not properly managed. If sold at the peaks and re-bought at the valleys, my account would be up 60%-150%. I could show you on a chart that as the bad news emerged into the market place that it was obvious the market top had been reached, therefore it was time to sell. With the market bleeding to new lows in March of 2009, and the world seemed to be ending, it was followed by a powerful rally after Bank of America and Citigroup posted profits, the bottom had essentially been reached… Time To Start Buying!
I am not saying that Joe Advisor needed to catch the very tops or bottoms, just close to it, you know like hand grenades, or horseshoes. With that being said I want to tell you how I went to interview to be an advisor with a huge advisory firm and what they told me. I sat in this meeting with a few other candidates and they gave me three criteria to pursue in order to become a “successful advisor”.
1. List as many people as you know that would have money to “invest” (AKA buy, pray, and hope). This included family members. Those poor poor people.
2. Ask these new prospects/clients what their “dream goals” were for their portfolio and their investments. (Sound familiar) In other words financial sales…
3. Create a plan for their portfolio and start investing their money in these financial instruments and start holding their hand as you build the relationship over the years to come. (This is ridiculous! If I want a friend I do not need to manage his money first.)
To carry on… I left that interview and this is the first thing that I thought about. How are my interests aligned with the investors interests. They are not aligned! No matter what happens in the market I still would collect my industry standard 1% management fee off of the assets under management. Let us assume that I had $4,000,000 under management, that would equate to $40,000/yr for my salary. That did not make any sense to me, as long as I was good at sales, then I would succeed! I could not continue thinking that I could pitch a lie and win in life. I needed truth, and a new business model to pitch with conviction.
Here was my newest investment pitch:
1. Account Owner shall immediately establish under his name one (1) Trading/Investment Accounts with TD Ameritrade, with Margin and all Options-Trading features activated, and shall fund the Trading Account with a sum of $1,000,000.00; and
2. Account Owner shall pay to Authorized Trader Or Account Manager weekly Commissions, based upon net profits generated each week within the Trading Account; and said Commissions shall be paid according to the following Commissions Schedule:
20% of the week’s net profits (realized gains only) generated within the Trading Account or Investment Account, if those net profits increase the value of the respective Trading Account(s) by less 1.5%; or
28% of the week’s net profits (realized gains only) generated within the Trading Account or Investment Account, if those net profits increase the value of the respective Trading Account(s) by 1.5% or greater,
3. In the event that the Account Value of the Trading Account or Investment Account shall fall to $950,000, (5% loss) Account Owner may opt to close that particular Trading Account or Investment account, and terminate this Agreement with the Authorized Trader or Manager, managing that particular Trading Account.
In other words if I didn’t make that account grow then I would not be paid!
As I started doing research over the years I started to assemble a strategy that would grow my account at an incredible rate. Yes at first I LOST, this is where I learned my most valuable lessons! My thesis concluded that 65-70 times out of 100 I would be correct in my intelligent speculations. There were two primary things that I learned. Most investors would buy the stock blindly (Ill explain)… because the company was fundamentally strong, a low P/E, no debt, great management, the strongest competitor, and a great stock price compared to tangible book value. I saw this flaw and started to analyze charts or also known as technical analysis. As I started to study charting, I realized a miracle! I could really identify the bottoms and tops of the move in the stock. As I mixed my new “market eyes” with fundamentals, my investments/trades started to take off! In three months I had my $800 baby/test/account which I was just playing with to see if I could grow it, go from $800 grow to $6800 in three months!
BAMM I fired my advisor!
You are Fired!
Then I decided to take what I had learned and teach others and here I am today, doing just that. So as I invest then I will learn more and more about the markets. This year will be opening my own advisory and hedge-fund based off these underlying profitable principles. Many of my current subscribers are very happy as I show them my techniques and show them how to find the best stocks to put your money in. The thing is that I am just showing them what I am doing, and if they want to follow in, that is totally up to them. Many of them have anywhere from $1000-$600,000 accounts so these techniques are applicable across all account sizes.
Well anyways, I am off to downtown San Diego to swim with the dolphins at Sea World… Maybe. Have a great Martin Luther King Day!
This video is about an hour long. So grab a drink, take notes, and watch! Below are the rough notes on the video.
Rehash + Notes of the Great Streaming Video from C2 Trading/Ben Brinneman:
Video/conference was conducted on 12/26/2009 by Ben Brinneman (C2).
With added commentary and analysis by Jim Ditsworth in BLUE
Use limit orders, never market orders.
A Limit Order is a (Buy or Sell) order at the best price.
Market orders can be filled at unusual prices since they are handled by market makers. In other words, you can get screwed. Limit orders will always be filled at the best fill price. The market maker cannot hold onto the order and manipulate the spread for a profit.
Example: Stock is trading at 7.40 and you want to BUY. You can send a BUY limit order using any price above 7.40. This avoids chasing the price with consecutive limit orders that don’t fill.
Example: Stock is trading at 7.40 and you want to SELL. If you enter a limit order at 7.40 it may not fill. But you can type in any price below 7.40 and the order will execute immediately at the best fill price. By law, the market makers are required to fill your order at the best price.
So !! IMPORTANT !! If a stock is trading at $12.42 and you want to BUY the stock, you will place a BUY limit order above the current trading price so that it will almost certainly fill.
Commentary/analysis (using a little internet research):
Limit orders get better treatment on the New York Stock Exchange than on Nasdaq. Specialists on the NYSE floor are required to give limit orders priority over their own trades at the same price. In Nasdaq, where several dealers make a market in the same stock, market makers must honor only their own customers’ limit orders. That’s an improvement from the early 1990s, when Nasdaq dealers routinely ignored less-profitable limit orders. Now, when a Nasdaq dealer receives a limit order better than his own bid or ask price, he must either fill the order or route it to one of nine electronic markets, such as Instinet, Island, or Archipelago, for display to other dealers and investors.
***
Understand what will happen when you place a limit order. It can only be executed at the specified price or better.
For a buy limit order, “better” will mean at or lower than the price you set; for a sell limit order, it means at or higher than the price you set.
***
(RESTATEMENT OF THE IMPORTANT CONCEPT HERE)
If you’re concerned that the market may move away from your price before your order is executed, consider placing a buy-limit order that’s slightly higher than the quoted market price, or a sell-limit order that’s slightly lower. This allows for a small amount of price movement, while still protecting you from an unexpected execution price.
Market makers are not allowed to fill orders at a price worse than the market price, even if your limit order allows for it. Building in a little extra room to ensure your order is filled will not cause you to overpay—you should still be filled at the prevailing market price when your order comes to the front of the line.
C2 talked about the DJIA from the 1930s and compared it to now. There could be some weakness in the DOW that could manifest itself in the next few months. Be careful going long… Follow the charts. Don’t try to predict the future.
***
(Here’s the Skype Chat during the video. Commentary is interspersed with the chat.)
anybody watching the video http://www.ustream.tv/channel/learning-how-to-daytrade
[12/26/2009 10:56:29 AM] rich.blinds: I can hear and see you fine
[12/26/2009 11:01:49 AM] alaska1004: How do you come up with the stocks you are scanning for the day?
Example: BIDU Stock is sitting at the lower vwap/bb on the 6month/daily chart
On a daily chart, look for stocks that are bottom/or upper bb
First of all, look for a stock on a long term chart that is either sitting at the upper BB and upper vwaps; or the lower BB and lower vwaps. If on the long term chart the stock is hovering over the lower BB and is encountering resistance, then you can consider going LONG on short term charts when you are bumping up against the lower BB and/or vwap bands.
If the long term chart of a stock shows the price hovering near the upper BB and/or vwap lines, and is beginning to encounter some resistance, then you can consider going SHORT on short term charts when you are bumping up against the upper BB and/or vwap bands.
Use FINVIZ.com with corresponding tables. See example.
Your browser may not support display of this image.
Look for stocks that have a big move on significant volume. Then go and check the news to see what, if anything, is driving the stock. Look for pullbacks to the opposite vwap (or just the middle vwap if the stock isn’t trading from band to band). Do a little internet research on the stock. Is the move warranted by the news?
You may be able to “catch the move” on news…
Commentary: Open up a new watchlist and put in ALL of the VINWIZ stocks, gainers, new highs, overbought, unusual vol, earnings before, insider buying, etc. Examine ALL of these on a 1 year-Daily. Do any of them meet the above requirements? I.e., are they sitting near an upper BB? Lower BB? Even better, near both upper VWAP and UPPER BB?
Hopefully you will find a few possibles for additional research.
[12/26/2009 11:02:34 AM] rich.blinds: You talked about the EMA flattening out when watching for a stocks movement. Is that when it is running up off the middle bollinger band or the middle VWAP?
Look at RIMM as an example. This is a daily chart. See the gap? This was a short in 71-72 price range.
See the following two charts but there are better ones below when this question is addressed again…
Your browser may not support display of this image.
Look at the EMA on the 1m and 5m charts and watch to see it leveling off. (Example RIMM).
Your browser may not support display of this image.
Here’s the 1 min chart from RIMM’s open on the GAP day. EMA (cyan line) is definitely flat or headed downward.
[What and when do you buy? ]
Look for stocks with big moves on DAILY charts that have been taken to an extreme. You are looking for a pullback. Find a stock that meets the TWS or VWAP parameters. Then switch to the minute chart and find a good buy point in the direction that you want to trade. “Trade with the trend.” This means on longer term charts, if the stock is generally headed higher, you will want to lean towards long trades instead of short trades. On stocks that are generally declining, lean towards short trades vs long trades.
Example: BIDU Options Play that C2 made. Waited for the price to settle down before making the buy. Used 3 day 5 minute chart at the start. Then switched to the 3 day 1 minute chart for the actual buy decision. When you sell, just watch the 1 min chart…
“And when it hits the upper vwap, sell and get out…”
[12/26/2009 11:11:58 AM] rich.blinds: So you bounce back between the 1 min amd 5 min?
[12/26/2009 11:13:29 AM] vnp1688: your entry is base on 1 min or 5 min ?
C2 uses lots of charts, including: 1 year daily, 5 month daily, 3 day 5 minute, then finally when it’s time to buy, he uses the 3-day 1 min.
The bigger time frames allow you to see the overall trend of the stock. Is it generally bullish or bearish?
Decision to purchase the stock is made on the 5 minute chart… Entry is based on the 1 min chart.
“On a 5 minute chart, the candles will sit right on top of the ema”
Jim’s note: EMA leveling off is still not entirely clear to me but I’ll take a look at the 5 min charts in addition to the 1 min charts from now on.
[12/26/2009 11:15:26 AM] rich.blinds: Would you mind discussing stop limits, when you use them and what distance you place between entry and exit
This is personal preference. You can use hard stops or mental stops. Good trading using our TWS and VWAP strategies should lead to very few stops actually happening. And our entry prices should be very good.
For buy trades: stop is 2 or 3 cents below the low of the day; or a “significant distance” below the lower vwap, or at a $300 stop loss. This occurs after the buy, after everything has lined up, after the 5-day ema has leveled out,
[12/26/2009 11:18:57 AM] C Squared Trading: http://www.ustream.tv/channel/learning-how-to-daytrade
[12/26/2009 11:19:03 AM] rich.blinds: So you use the upper VWAP to use to grab profits when its moving up along with the other indicators moving in the same direction.
Yes, when it hits the upper vwap, I’m out.
Mike’s rule: 3 tick rule. If it hits the upper vwap and doesn’t move higher in 3 ticks, he’s out.
This is a good rule that will allow the stock to run.
C2 sometimes sells ½ position on the run up to the upper vwap. Seems like a good idea cuz the stocks don’t always go to the upper vwap!
[12/26/2009 11:22:09 AM] vnp1688: why short MIC now
MIC is riding the upper vwap on the weekly and daily charts and is pretty high on the minute charts. It also has a high beta so if there is a bad day for the market, MIC tracks and follows the market but is more volatile so it should go down plenty.
[12/26/2009 11:25:31 AM] vnp1688: can u take a look on ATI weekly chart for me , yhx
Looks like a short.
[12/26/2009 11:25:57 AM] rich.blinds: Which stocks do you think will have some movement this week?
AAPL may go to 230. It’s broken out to a new trading range. Rumors of new tablet reader. But the volume has been key.
[12/26/2009 11:27:47 AM] rich.blinds: Will you buy options or the stock?
[12/26/2009 11:28:24 AM] rich.blinds: AAPL
[12/26/2009 11:29:28 AM] rich.blinds: Jan expiration
Like to buy the options on stocks that are up in the $200, $300 range. For AAPL, would need for the stock to pull back to the $199, $200 area. Options are tricky. Buying out of the money stocks can give you better pct return than in the money stocks.
[12/26/2009 11:33:40 AM] alaska1004: Had a good xmas. I am still in PUDA in my ira it has had a good run up. do you think I shud sell a portion or let it ride
Not recommending, but would sell at this time. Looks like a stock offering is in the works.
What will Jan 2010 bring?
Usually don’t care what the market is doing. Look at individual stocks and don’t try to predict the future. Look for triple whammies, setups, and vwaps. Don’t focus on overall stock market. But look for individual stocks that are moving.
Discussion of Level II stock screens and manipulation:
Level II screens show the buyers and sellers who are currently in the market. BID = buyers. ASK = sellers. You can get an idea of the strength of buying or selling from the level II screen. Another tool that you can use, but you have to learn how to use it.
Discussion of 2 monitor setup:
On left screen, has 3 level II screens, watchlist, charts in top left, main monitor, news, account…
[12/26/2009 11:39:12 AM] vnp1688: could u please repeat Rich’s question: You talked about the EMA flattening out when watching for a stock’s movement. Is that when it is running up off the middle bollinger band or the middle VWAP?
Timeframes are important. Wanted to buy RIMM and it was tanking from the 70s to 68 or so. On 5 min chart, the EMA was pointing down. On the 1 min chart, the EMA was pointing down. Playing off the bottom vwap. Watched as the 5 min EMA leveled off… Then switched to the 1 min EMA to look for buy point.
Your browser may not support display of this image.
This looks like the time in question. This EMA line (5 day 5 min chart though, not 3 day 5 min which C2 used) is still going down until the 9th candlestick past the last violation of the vwap. That was 9:45 when it finally leveled off. The decision to buy RIMM was made from this screen, as long as everything else pans out on the 1 min screen to follow.
Your browser may not support display of this image.
On the 1 min chart, the EMA line has leveled off at 8:59 or 9:00.
Watch the EMA on the 3 day 5 min and also the 1 day 1 min chart and stay out of the position until the 1 day 1 min EMA is level. Don’t try to catch a falling knife! Look for the candlestick confirmation above the ema. 9:00 candlestock has closed above the cyan ema here.
This is riskier, but C2 also likes to “buy in” when the stock plunges down deep below the vwap lines to hopefully get the lowest price, but then he still looks for ema confirmation (or a quick exit if the stock decides to tank!). This is the difference between scientific chart buying and art. Recognize the risk that is being taken. Or play it safe and don’t buy until the confirmation occurs.
Overview of next week:
Light volume. Stay out of stocks that are < 100,000 daily volume. Focus on the runners and oversold/overbought. Use charting. Let’s look for the runners though cuz you can make a bunch of $ on them if you can find one.
Secrets to trading:
Minimize the trades. Do 1-2 a week. And/or stick to rules. Don’t shoot in the dark like a midnight cowboy. Be consistent. Don’t try to make a big buck in one trade.
Be patient and add to your winners:
Remember to cut your losses. Don’t hold onto your dogs and/or your losses.
[12/26/2009 11:50:55 AM] rich.blinds: When you talk about adding to your position as a price rises, how much of your available trading dollars do you typically use, to use in long positions that you might hold for a few months versus a few days?
Allocate accordingly. How many shares? 10,000. First lot will be 3,000. As stock rises, another 3,000 (on a pullback). Finally, on another pullback, another 3,000. Keep adding 1/3 of a position at a time.
Price target or % target. And then scale out of the position.
Have an overall position in mind before initiating first trade.
[12/26/2009 11:52:58 AM] rich.blinds: It does thanks
[12/26/2009 11:54:25 AM] vnp1688: thx
[12/26/2009 11:54:48 AM] rich.blinds: This has been excellent, thanks for taking your saturday and time to continue to help out! Later.:)
[12/26/2009 11:55:15 AM] C Squared Trading: no worries! Thanks Ill be on next week. (dance)
[12/26/2009 11:55:34 AM] alaska1004: thx ben.
This is a perfect overview of the markets and you will learn alot about what he is seeing on the charts.
The C-Squared STOCK ALERT Service is solely an educational information service. The information is not intended as investment advice, as an offer or solicitation of an offer to sell or buy or as an endorsement, recommendation or sponsorship of any company, security, or fund.
C Squared Trading, its founders, its licensors, content providers, employees, officers and directors (hereinafter referred to as The Company) does not warrant that the information contained in the Service is accurate or complete. The Company is not responsible and does not guarantee that the information contained herein or distributed from this site will be uninterrupted or error-free, or that defects will be corrected, or be liable for any errors or omissions that may be found in such information or for the results obtained from the use of such information. Subscribers and users of the service contained herein or distributed from this site (CSquaredTrading.com) are encouraged to consult other sources and confirm the information contained within the Service. Subscribers and users of the service understands and agrees that the Service should only be used as one of several research tools and that subscribers and users of the free service should consult with a stock broker or other investment professional prior to making any material investment decision. Both long-term trading, position trading and intraday-trading have potential rewards, as well as large potential risks. Trading may not be suitable for all users of this site or the information provided by this service. Subscribers and users of the service assume the entire cost and risk of any trading they choose to undertake. Any reproduction, re-transmission or redistribution of any information, provided by CSquaredTrading.com is strictly prohibited.
