FWLT gave me a little scare as it continued its slide from yesterday.  It made it down to $31.45 this morning before returning above $32.00 (my strike price) briefly.  Finally, by 3:30 I had enough waiting (especially after seeing it below $28 just a few weeks ago) and entered a limit order to close my two naked puts if they made it back up closer to $32.00 again.  Just a couple of minutes later, while FWLT was trading at $31.98 I bought to close my two FWLT November 32 naked puts (UQIWF) for $0.05 each and paid $21.49 with commissions.  After originally taking in $298.50 for these options I made a profit of $277.01.  If I wasn’t closing my TD Ameritrade account I probably would have rolled these to December expiry or taken the risk of having the options assigned, but that’s not my situation so I had to deal with it earlier than I wanted to.  FWLT ended up closing at $32.01 for the day, but when I checked at 4:01 it was still showing $31.97.  The after hours settling pulled it higher so I ended up wasting $21.49, but even if I had waited until 3:59 to place my order I would’ve made the same move.  FWLT was clearly one of the stocks that was getting pushed around today by the bigger option players.

The underlying stocks for the rest of my options were close enough to their strikes to make me think I did a pretty good job picking the right strike when I sold each naked put.

• EEM Nov 40 puts – EEM closed at $40.66, making my option the closest strike out of the money.
• QLD Nov 50 puts – QLD closed at $53.58, giving me a decent cushion by expiration, but a few weeks ago QLD fell below $48 which made me glad at the time that I hadn’t aimed higher.  In the end, I could’ve aimed higher, but the stress might not have been worth it.
• SSO Nov 36 puts – SSO closed at $36.63, making my option the closest strike out of the money.
• UWM Nov 23 puts – UWM closed at $24.93, making my option one dollar lower than the closest out of the money strike.  UWM fell below $23 a few weeks ago when it found support, so I felt comfortable at the level.

This is my last options expiration with TD Ameritrade.  I’m excited about working in the cheaper pastures of Interactive Brokers next month.  I’ve sent a portion of my cash in and can start trading in the account on Tuesday.

I still have high hopes for NDAQ’s recovery, but time isn’t on my side right now compared to my desire to transfer my entire account immediately.  I posted an NDAQ chart yesterday to show that it’s at a turning point.  In the end, I decided not to take the risk of NDAQ turning below its 10 day moving average and back down to the low end of its trading range.  While NDAQ was trading at $19.24 my limit order hit and I bought to close six NDAQ November 20 naked puts (NQDWD) for $0.80 each and paid $494.49 including commissions.  Originally I sold these NDAQ puts in two lots, three at $0.80 and three at $1.05.  That brought in $530.50 after commissions which leaves me with an overall profit of $36.01 for both lots combined.

I canceled two lower limit orders to get both of these orders to hit.  At TD Ameritrade there’s no charge for that.  Once my account is moved to Interactive Brokers I will be charged for those cancelations , but even with that additional charge at IB I’d still have paid much less in commissions to close these positions there.  I’m starting to get excited about the change for the cost savings, but will miss the AMTD interface.  While I’m in my office at work I’m still blocked from IB’s desktop trading platform and the Web version leaves a lot to be desired.  The good news is that I work from home two to three days per week.

The rest of my options are sitting out of the money still, but their underlying stocks are falling and some are getting closer to moving below their strikes (in the money).  Not counting premiums I’ve taken in, I have a $0.61 cushion above the strike on EEM, $0.54 on FWLT, $3.91 on QLD, $0.71 on SSO and $2.01 on UWM.  I considered closing all of them out today and not risking a steeper fall tomorrow, but figured the two I closed today was enough for now.  If I add in the cost to trade and the time value left for the next day and a half I’d have to pay $25-35 per position to close each one.  I don’t think all, if any, will move deeper than the current time value by tomorrow’s close.  If they do, then I’ve made a mistake by waiting.  It’s a small risk either way, so I’m waiting it out.  Needless to say, I’ll be watching closely until 4:00 pm tomorrow.  I already withdrew $40,000.00 from my account this week and plan to transfer most of the rest next week when everything has settled.  I’ll close the account after I receive my dividend and interest payments due for November.

As my next step in setting up my Investment Advisor business I contacted AMTD to open an account with TD Ameritrade Institutional.  Their site looked good from the outside and they promoted their services as great for “emerging Registered Investment Advisors”.  Yet when I called I was told they have a $10 million minimum value for accounts under management.  Since I’m about $9.9 million short of that right now I was forced to look elsewhere and AMTD will miss out on all of my commissions each year and those that would have come from the accounts I’ll manage.  I’ll probably leave my wife’s IRA at AMTD to maintain access to some of their third party reports, but I don’t trade a lot in it so it might be a better to have it their without getting charge the minimum monthly fee at IBKR.

I’m moving my margin trading account (the one I blog about) to Interactive Brokers and will suggest my clients use them also.  Without going into full details, they seem to have a good set up for Investment Advisors and do not have a minimum balance requirement for accounts under management.  My monthly trade volume has gotten steady enough that I should come out better on a commission basis there, although I still don’t like being charged for changing a limit order.  I figure I’ll still come out ahead though and since having access to a custodian for my client’s accounts is crucial for me, I had little choice out there. 

The big pain of this decision is moving my cash from one company to another.  The timing is good though.  With most of my options slated to expire out of the money this week I’ll be able to get most of my cash out without having to kill long term positions.  The stragglers will be my NDAQ position that’s still almost a dollar in the money and UCO which is my only December option.  This weekend I set a limit order to sell my long BND shares and within the first 30 seconds my order hit and I sold 100 shares of BND at $79.58 and received $7,947.80 after commissions.  I’ll sell my PVI shares this week too (I won’t waste a post on that trade and can already tell you it will be 2900 shares at $25.00) and start withdrawing cash and moving it to IBKR.  I held my BND shares for less than two months and made $38.91 on the shares after commissions and $50.09 in dividends.

I might end up closing out my UCO and NDAQ positions early just to make a clean move, but if those are my only two positions I leave behind I’ll still have more than $60k I can transfer to get me started at my new investing home.  You never know, by the end of this week I could be sitting on a paper profit on my NDAQ and UCO naked puts and might buy them back and reopen them at IBKR without having to worry about the wash rule.  I still like both plays for the longer term, so I don’t want to lose out just because I’m anxious to have all of my funds in one account a few weeks earlier.

I have a hard time thinking that this would be a good time to open a new bullish position based on how the DJIA Chart looks.  I circled the six times the index has hit its upper trend line of higher highs.  After each touch of this line it moved lower soon after.  That’s not to say it’s going to happen on Monday necessarily.  You can see the past three times it got up here the DJIA worked the line for a week before giving up and heading lower.  My point is that if this line continues to act as resistance, the upside potential from here is limited.

What’s starting to get interesting is the point difference between the two trend lines is getting bigger.  The trend line of higher lows is running at a smaller angle than the upper trend line of higher highs.  The slope of the lower one is probably more realistic over a longer period of time, but we’re in the final two months of the year and a lot of money is chasing results before the end of the year.  That could mean we don’t get a dip all of the way to the lower line until the new year and then I wouldn’t be shocked to a little bit more of a reversion to the mean.

The mean isn’t the lower trend line, but that’s probably the point we could over shoot to.  The mean comes from moving averages.  the 50 day moving average is right at the 10,000 mark now, less than 3% below the Dow’s current level.  That would be an easy dip and should bring more buyers into the market.  That’s especially true due to the end of the year chase and the fact that all of the recent dips have stopped at 5-6%.  I’d think a lot of money managers are aware of that and will start to position themselves a little earlier this time around so they don’t miss the bump back up. 

On the bullish side – Thursday saw a bullish crossover of the 10 day moving average over the 50 day moving average.  Williams %R hasn’t fallen below overbought yet.  It can stay in that range for a while, so according to these technical indicators good times are still on their way.  If only volume could support that argument I’d be more incline to jump in, but it doesn’t.  Volume has been weak during this little rally with the only days that have gotten above the average being down (distribution) days.

Options expire this coming Friday giving this week an extra volatile tinge to it.  Be careful not to get tricked into any overly ambitious moves based on one or two days of price movement.  It could just be some of the big boys reshuffling their portfolios.

——————– ——————– ——————–

Welcome to the November 13, 2009 Edition #115 of the Carnival of Financial Planning.

The Carnival of Financial Planning takes a long-term view of personal financial planning for individuals and families. We focus on efficient and sustainable personal financial planning practices that can lead to lifetime financial security. 

This edition is arranged by subject heading, so that you can browse efficiently.

Enjoy!

The Skilled Investor, Editor

Budgeting

Adam Williams presents Eat food in your pantry, you’ll save money. Really. posted at RabbitFunds.com, saying, “I think we’ve all read articles talking about how we should make a shopping list before going to the store. We almost always make a list. And yet, we still have what I’m going to call “unintentional food storage.””

April presents Large Amounts Matter Too posted at Get Rich Slowly, saying, “Remember: Saving money on the little things every day is great, but saving money on the big things can make an awesome difference to your budget.”

Four Pillars presents Get Out Of Debt With YNAB – You Need A Budget Financial Software Review posted at Quest For Four Pillars, saying, “Indepth review of You Need a Budget software.”

Baker presents Budgeting Ups and Downs: October and Beyond posted at Man Vs. Debt, saying, “Ever since we’ve left overseas, our budgeting system has been on one huge roller coaster ride. I’ve outlined what we DIDN’T plan for and what areas we had success. What about you, though… how was your budget in October? What about November?”

Susan Saverton presents Personal Budgets posted at Family Financial Planners, saying, “When you don’t understand how much you spend and how much you save and invest, you do not have a financial plan. This dramatically increases your family’s long-term financial risk.”

The Debtress presents Financial Lessons from a Man Who Lives for Free posted at - The Debtress Blog -, saying, “Daniel Suelo of a Utah lives in a cave and has no money. Lessons we can all learn from his lifestyle.”

Wise_Bread presents The First Step to Budgeting posted at Wisebread.

Estate Planning

The Financial Blogger presents Estate Planning: 5 Reasons Why You Should Have A Professional Among Your Liquidators posted at The Financial Blogger, saying, “managing an estate is more complicated than simply writing a few checks! Fortunately, for those who can afford it, you can name a professional among your liquidators.”

Jeff Rose presents Your Estate Planning Checklist posted at Jeff Rose.

Financial Planning

Dividend Tree presents Building Core Competency for Long Term Survival posted at Dividend Tree, saying, “whether it is running a business or individuals’ investment portfolio, it is important to build a core competency for long term sustainability. In my case, I focus on good quality companies that consistently pay or have potential to pay growing dividends over time.

jim presents Conduct a Financial Fire Drill posted at Blueprint for Financial Prosperity, saying, “Conducting a financial fire drill is one of the most important financial planning steps you can take. You can make better decisions when you aren’t emotionally involved.”

Susan Saverton presents Financial Advisor Pasadena California posted at Pasadena Financial Planner, saying, “Appropriately setting your personal asset allocation in line with your personal risk tolerance is a critical decision for every investor. The percentages that are allocated to various asset classes tend to change slowly over time, so it is important to get it right at the outset.”

Financing a Home

Joe Manausa, MBA presents Home Buyer Tax Credit Expanded By Congress posted at Tallahassee Real Estate Blog, saying, “Congress has extended and expanded the homebuyer tax credit. The modifications will become effective when President Obama signs the bill, which could occur as early as November 6, 2009.”

Roshawn Watson presents Should You Buy A House Outright? posted at Watson Inc, saying, “Suppose you find yourself in the somewhat unique predicament of having the resources to purchase your house outright without a mortgage. Is it then financially-wise to make the purchase?”

Madison presents $6,500 Home Buyer Tax Credit for Existing Homeowners posted at My Dollar Plan, saying, “Great news for those planning to move soon! A tax credit for existing homeowners.”

Alex Fotopoulos presents When to Refinance a Mortgage? posted at My Trader’s Journal, saying, “Some key points to consider when refinancing your home.”

Financing Education

Praveen presents Will Education Follow the Housing Bust? posted at My Simple Trading System, saying, “Tips for students to avoid excessive loans and debt”

Health Care

Jeff Rose presents What’s the Best Health Savings Plan For You? posted at Jeff Rose.

PT presents Save Money on Health Care: A Quick Summary of Tax Advantaged Medical Savings Accounts posted at Prime Time Money.

KCLau presents Withdraw EPF Fund to Pay Insurance Premium? posted at KCLau’s Money Tips, saying, “Vincent Lee generously shares an idea to use your EPF”

Income

Ted Reimers presents Tips for making a Career Change posted at A Degree Online, saying, “The road to financial independence requires many changes. Here are a few tips when changing careers.”

nissim ziv presents What Are Your Salary Expectations? posted at Job Interview Guide, saying, “It is worth being prepared to answer this question wisely because you can, accidentally, make some critical mistakes that greatly weaken your negotiating power down the road.”

Dividend Tree presents Three Companies with Sustainable Dividends posted at Dividend Tree, saying, “Even in soft economic environment, there are companies out there that are continuing to increase dividends for their shareholders. While dividend increase is good, it is more critical to make sure we understand that companies can sustain their dividends.”

Investing

Soo-Young presents 10 Things Zombieland Taught Me About Stock Market Investing posted at Bullishness.com, saying, “Applying The Zombieland Rules To The Stock Market”

ABC presents Top Down Investment Approach posted at ABCs of Investing, saying, “An explanation of the “top down” investment method.”

Aussie Investor presents How To Buy Shares In Australia posted at Australian Investing, saying, “Investing in the stock market can be a rewarding experience, but where do you start? This post introduces the mechanics of buying shares. What sort of things do you need to consider beforehand and how do you actually go about making your first purchase?”

Zach Scheidt presents Blue Nile Reports Growth posted at ZachStocks, saying, “Blue Nile Inc. (NILE) reported earnings growth in the third quarter. The company is growing market share but the stock is simply overpriced. Watch for a 50% drop in the coming months.”

Super Saver presents Dow 10,000 3.0 – What’s Next? posted at My Wealth Builder, saying, “After the Dow crossed 10,000 in October, 2009, the big question is where next . . . up, down or sideways?”

Fred Elkins presents Diversified Munis Offer Good Value and Minimize Your Tax Burden « Finance Banter posted at Finance Banter, saying, “Diversified muni funds offer investors current income without increasing their tax liability. Here is advice on what to look for and a few core choices.”

Patrick @ Cash Money Life presents Best Discount Brokerage Firms posted at Cash Money Life, saying, “A list of the top online discount brokerage firms, including a short review of each to give information about what gives each brokerage an advantage over the others.”

Jules Wells presents Best Investment Strategy posted at Financial Planning Software, saying, “Personal investing seems incredibly complex, but the best investment strategy also tends to be a more simple investment strategy.”

Roshawn Watson presents Save For Retirement or Avoid Student Loans posted at Watson Inc, saying, “If a student is working and has acquired some cash, should he or she use that money to avoid future student loans or invest the money for retirement?”

Praveen presents Just Bought Hyatt Hotels (H) posted at My Simple Trading System, saying, “About Hyatt’s recent IPO and why its a good stock.”

Patrick @ Cash Money Life presents Alternative Investments to High Yield Savings Accounts posted at Cash Money Life, saying, “Looking for a safe place to stash your cash and still receive a decent rate of return on your money? Then check out this article, which lists several good safe investment alternatives to standard high yield savings accounts.”

Silicon Valley Blogger presents EverkBank Review: Online Bank For High Yield Investment Accounts posted at The Digerati Life, saying, “I look into some interesting CD products from Everbank.”

MoneyNing presents How to Get Your Wife to Invest posted at Money Ning, saying, “Talk and discuss. Learn how to get your significant other to invest!”

Control your Cash presents Reading this post will make you sound 477% more financially literate posted at Control Your Cash, saying, “What does Dow 10000 really mean?”

Curt presents How I Plan to Double My Money Twice Next Year posted at PennyJobs.com.

Zach Scheidt presents Blackstone Sees Improving Trends posted at ZachStocks, saying, “The Blackstone Group, LP (BX) reported earnings and the stock is trading sharply higher. The environment is improving for the private equity company as liquidity and risk premiums increase.”

ABC presents More Exciting Facts About Stock Indexes posted at ABCs of Investing, saying, “Some interesting facts about stock indexes.”

GeoffG presents Technical Analysis | Stock Market Timing Signals | Top Stock Picks » Blog Archive » Technical Analysis and Market Timing Update for 11/10/09 posted at Market Timing and Top Stock Picks, saying, “Want to know the best and worst time to own stocks. Use technical analysis and market timing signals for long term investing success.”

FMF presents Portfolio Recommendation Beats S&P 500 by 9.4% posted at Free Money Finance, saying, “Suggestions on a market-beating portfolio.”

lifestyles presents Chunking: Using Passive Income Streams from Real Estate to Pay for Chunks of Your Bills posted at Lifestyles Unlimited Real Estate Investing and Mentoring, saying, “Brian Lee addresses the concept of “chunking.” Pay off parts of your bills by investing in real estate!”

Frank Vertin presents Low Cost Index Fund posted at Best Index Fund, saying, “Buying an S&P 500 index fund through an investment counselor can substantially increase your initial purchasing costs and and drive up your annual management expense fees. Unfortunately, the vast majority of individual investors buy mutual funds and ETFs through brokers and investment advisers. Rarely do financial advisors recommend that you buy index funds with low fees. This is because low cost, no load mutual funds do not pay them as well as loaded, high fee mutual funds.”

Dividends4Life presents 4 Stocks With Higher Dividends posted at Dividends Value, saying, “Investing in Dividend Stocks is a long-term strategy. Frequent buying and selling of dividend stocks can significantly increase your expenses and taxes, thus lowering your returns. A growing dividend is a strong indication of a company’s increasing intrinsic value.”

ABC presents “Bottoms Up” Investment Method posted at ABCs of Investing, saying, “A short description of “bottom’s up” investing style.”

Steve Alexander presents Magic Formula Buyouts and Bankruptcies 2009 posted at MagicDiligence – Optimizing Joel Greenblatts Value Stock Strategy, saying, “In addition to normal capital returns and dividends, the Magic Formula has a knack for finding stocks that are good acquisition targets – but also some that go bankrupt. A look at some buyouts and bankruptcies on the MFI screen in 2009.”

Mike Piper presents Where to Rollover My 401k posted at The Oblivious Investor, saying, “For anybody who has left their job recently, one of the biggest questions is what to do with their old 401k. This article helps sort through the three major options.”

Tomas Escent presents Professional Investment Management posted at Nerds on Wall Street, saying, “Think of this book as sort of a Hitchhiker’s Guide to Wired Markets. There are no robots parking cars for six million years, but there are robots trading millions of shares in six milliseconds, so maybe that’s close enough.”

The Skilled Investor presents Investing Strategy posted at Personal Investment Manager, saying, “Investors more easily understand investment costs that are directly measurable, such as fees deducted on investment statements. However, many investors ignore or are unaware of the opportunity costs of their sub-optimal investment behaviors. Opportunity costs are usually much more difficult to measure directly, but these investment costs can be even higher than more visible investment fees.”

The Financial Blogger presents The Financial Blogger » Blog Archive » Canadian ETFs That Pays Dividends – Am I in Heaven? posted at The Financial Blogger, saying, “There are a lot of people that love dividends. There are 2 major reasons why so many investors love them. #1 they are usually issued by very stable companies which mean less volatility in a stock portfolio. #2 they pay quarterly income, which is great for revenue seekers.”

Mike Piper presents Is Technical Analysis Profitable? posted at The Oblivious Investor, saying, “An extremely thorough study was recently performed, testing over 5,000 different technical analysis trading rules. The results: Not so rosy.”

Diane Laine presents The Definitive Inverse ETF Guide posted at ETFdb.

Tushar Mathur presents Can’t Control the Markets? Try controlling the Costs posted at Everything Finance, saying, “As 2008 proved, the financial markets are prone to unpredictable periods of turbulence. That can make investing feel a bit like a roller-coaster ride. The disappointing results that many mutual funds posted in 2008 and at the outset of 2009 may have left you feeling concerned over your financial future. You’re not alone.”

Larry Russell presents NoLoad Mutual Funds posted at Best No Load Mutual Funds, saying, “Taken as a whole, the vast body of investment research studies show that there really are better approaches to buying and owning mutual funds and ETFs. You do not need to frantically chase fund performance. Performance chasing simply does not work.”

Zach Scheidt presents Rosetta Hits IPO Price – Lowest Trading Since April posted at ZachStocks, saying, “Rosetta Stone Inc. (RST) has traded below it’s IPO price, leaving all investors with losses. Weakness in consumer spending, and a difficult macro environment will likely continue to pressure this vulnerable company.”

Managing Debt

Darwin presents The Truth About Rewards Credit Cards – But, Is it Really True? posted at Darwin’s Finance, saying, “After ABCNews published some rather disturbing data on the spending habits of users of reward cards, it’s worth evaluating their assertions because Correlation is not necessarily Causation. Is this just sloppy reporting or is there something to be concerned about?”

Manshu presents Disney Rewards Visa Credit Card posted at OneMint, saying, “A look at the rewards and features of the Disney Visa Credit card.”

MoneyNing presents Credit vs Debit Transactions with Your ATM Card posted at Money Ning, saying, “Are there any difference with saying credit or debit when you hand over an ATM card?”

Tristan presents How Do Debt Collection Agencies Work posted at How To Eliminate Debts, saying, “A quick look at how debt collection agencies work with creditors to collect on delinquent debts.”

oneadvice presents Debt Management Solution posted at One Advice, saying, “Looking for a debt management solution which is right for you? Be clear and concise about your debt management requirements before signing ANYTHING….”

The Smarter Wallet presents How 0% Balance Transfer Credit Cards Can Save You Money posted at The Smarter Wallet, saying, “You can save money with the right kind of credit cards!”

The Dough Roller presents Balance Transfer Credit Cards posted at The Dough Roller, saying, “Balance Transfer Credit Cards”

Miscellaneous

FMF presents How to Buy a New Furnace and Air Conditioner posted at Free Money Finance, saying, “Keys steps to buying a great furnace and AC unit at a great price.”

No Load Bond Funds presents Low Cost Bond Funds posted at Bond Index Fund, saying, “Simply put, if you pay higher bond mutual fund fees, then these bond management expenses tend just to be a deadweight loss to you. The best bond fund buying strategy is to pick only very low-cost no load bond funds.”

Mike presents Journey of 1000 Miles: Part III of III posted at Minting Pennies – Personal Finance, Investing, and Microfinance, saying, “A post about finishing the journey to achieving good credit and reaping the rewards you are at the final destination. It is also about the importance of reaching out and helping others during your journey.”

Tom @ Canadian Finance Blog presents Do You Know If You Are Owed Money From A Bankruptcy? | The Canadian Finance Blog posted at The Canadian Finance Blog, saying, “To help you find out if you are owed money from bankrupt debtors, the Office of the Superintendent of Bankruptcy maintains an Unclaimed Funds Database.”

Frank Knight presents Identity Theft Prevention posted at Personal Financial Planning Software, saying, “Financial Planning and Identity Theft Prevention — Identity theft prevention is a key, but often overlooked, component of a prudent financial plan.”

Tyler Tervooren presents Stop Feeling Guilty and Go Do Something Awesome posted at Frugally Green, saying, “Guilt gets in everyone’s way. We use it as motivation to do all kinds of junk we don’t really care about, but think we should. What could you accomplish if you forgot about what everyone else thinks you should be doing and started making your own rules?”

Susan Saverton presents Personal Financial Strategy posted at Family Financial Planner, saying, “When pursuing optimal financial planning and investing strategies and controlling your costs and capital gains taxes, you also need to establish a time-efficient system to monitor, adjust, and adhere to your financial plan.”

Retirement Planning

FMF presents The World’s Best Places to Retire posted at Free Money Finance, saying, “One way to make your retirement savings go farther is to retire overseas.”

Jeff Rose presents 2010 Traditional and Roth 401k Contribution Limits posted at Jeff Rose, saying, “401k limits for 2010 have been announced.”

Patrick @ Cash Money Life presents 2010 Roth IRA Contribution Limits posted at Cash Money Life, saying, “The IRS recently released the 2010 Traditional and Roth IRA contribution limits. Now is a great time to get started on your retirement and tax planning for next year!”

Frank Knight presents Roth IRA Retirement Planning posted at Financial Planning Software, saying, “Roth IRA Retirement Planning — Deciding between traditional retirement plan contributions and Roth retirement plan contributions”

Jeff Rose presents What you need to know about your Medicare and Medicaid Benefits posted at Jeff Rose, saying, “Many seniors have misconceptions on the differences between Medicare and Medicaid eligibility benefits. Throw in long term care insurance, and the water gets even more muddier.”

Top Stock Index Mutual Funds presents Stock Index Funds posted at Top 10 Index Fund, saying, “To build your retirement portfolio, buy some of these top 10 very low cost no load S&P 500 index mutual funds directly. You do not have to pay the heavy added expenses of buying through a stock broker, financial adviser, investment adviser, or investment counselor.” 

Risk Management and Insurance

Patrick @ Cash Money Life presents Save Money on Auto Insurance Rates posted at Cash Money Life, saying, “Tips on how to save money on your auto insurance rates, including multi car discounts, multi-line policies, defensive driving courses, and more.”

Chris McClelland presents Things to not say to your insurance company posted at Lucrative Investing.

Patrick @ Military Money presents COBRA Benefits 2009 Economic Stimulus Recovery Act posted at Military Finance Network, saying, “The 2009 Economic Stimulus Plan includes additional COBRA and unemployment benefits.”

Savings

MBB presents Best Online Bank: Savings and Checking Accounts posted at Money Blue Book Blog.

The Smarter Wallet presents HSBC Direct Review: Top Savings Account posted at The Smarter Wallet, saying, “Reviewing an online savings account”

Four Pillars presents $8,000 Credit For First-Time Homebuyers Extended 6 Months – Not Increased To $15k posted at Quest For Four Pillars, saying, “Home buyers credit extended 6 months.”

Jody T Fransch presents The Law of Saving | jody fransch posted at jody fransch.

David Carlson presents Attitudes Towards Savings posted at Dual Income No Kids, saying, “This article is about American’s view towards saving and how we as a nation are saving less than the past. This is done through comparing past attitudes towards saving to today’s attitudes towards saving. It also talks about how saving can be more than just an emergency fund and can serve other purposes.”

KCLau presents Caring for the Elderly posted at KCLau’s Money Tips, saying, “Problems faced by the elderly”

Taxes

Super Saver presents End of Year Tax Planning – Deductions posted at My Wealth Builder, saying, “For me, October is a good time to review my 2009 financial status for tax return filing purposes. It gives me a few months to make any changes that can lower my taxes.”

Jacqulyn Richey presents First Time Home Buyer Tax Credit Extended posted at Las Vegas Real Estate News, saying, “Details of the extension of the 2009 First Time Home Buyer Tax Credit. A breakdown of who now qualifies, the new income limits and the extension deadline.”

Jeff Rose presents 2010 Traditional IRA to Roth IRA Conversion Tax Rules posted at Jeff Rose, saying, “Tax implications of converting from a Traditional IRA to a Roth IRA. Don’t forget the after-tax contributions.” 

That concludes this edition. Submit your blog article to the next edition of Carnival of Financial Planning using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: carnival of financial planning, blog carnival.

On November 2nd, NDAQ hit a near term low and for the next few days toyed with going back to retest it.  Finally on the 9th it moved above its 10 day moving average, tested that line for the following two days and then this morning NDAQ gapped up above its 50 day moving average.  I won’t be shocked to see it test the 50 day moving average for a day or two, but think the move higher for it is finally coming, at least that’s my plan for it.  NDAQ is up more than $1.50 from its low which is worth more than $900 to me. 

With six and a half days to go before my six November options expire a lot can change.  I’m not starting to count my chickens before they hatch.  I charted DIA this morning and see the Dow Jones ETF is hitting resistance.  As is often the case, when the Dow falls so does much of the rest of the market.  I don’t think we’ll get more than a 5% correction if it does dip.  It could be that would be a great time to have my options expire.  Either they’ll end just in or just out of the money.  That will set me up to rewrite the options on the same underlying stocks at better premiums or lower strikes or I’ll take the option assignments and ride the bounce back up.  It’s a little early to plan too much for it, but I like to have some type of game plan in advance so I don’t just have to react emotionally.

Below you’ll see my full list of options I’m short right now.  I have no long option or stock positions.

The tech heavy index is starting to show some strength again after coming down off its highs of the year.  The key reversal of the down trend came when $COMP hit the trend line of higher lows.  The same trend line that started a few months ago as resistance and then acted as support for the following few months came back into play this week and held the index up.  This was welcome news for the bulls to see after the index broke below another, longer trend line of higher lows last week.  Now this broken line of support could be the new line of resistance as the $COMP fights its way higher.

The 100 day moving average (not shown) is moving higher and is close to 5% below the current price near the 2,000 mark in case this trend line falters soon.  The moving averages in play right now are the 10, 20 and 50 day.  They are somewhat hard to see since I took this chart out for six months to capture the trend lines.  The 10 day moving average was the first to break and then became the first one to have the index pull back above it close to the same time the 50 day was passed again.  Friday morning the $COMP opened on the 10 day moving average, held support and moved higher to close above the 10 and 50 day averages.  The point of resistance for Friday came from the 20 day moving average.  It broke before the $COMP really dropped hard a couple of weeks ago and is once again a hurdle we need to see the NASDAQ deal with before having room to run.

Along with the trend line of higher lows offering support and the moving averages appearing to be close to opening the door for a run higher, the Williams %R indicator is giving a bullish signal too.  I’ve circled a few of the past instances when %R has shown the same move out of the oversold area.  You can see each one marked the beginning of a new rally.  Not every rally had strong legs, but for the past six months each point has marked a new near term low.  That’s what it appears we’re seeing now.  Watch on Monday to see if the NASDAQ Composite Index can climb above its 20 day moving average and if it does we should see more than a few ticks higher in the days to come.  If it doesn’t, stay nimble.

After seeing the rally last the entire day yesterday and my order never hitting I decided to wait for the oil inventory numbers to be released this morning to decide on my next move.  When oil popped higher I canceled my first order and entered a new one.  By this time UCO was up by more than $1.25 from where I could’ve gotten in yesterday.  While UCO was trading at $14.26 I sold four UCO December 13 naked puts (UCOXF) for $0.85 each and received $327.00 after commissions.  I admit I chased the trade more today and should’ve waited for UCO to come off its highs some.  It’s been a couple of hours since my limit order hit and now I see I could’ve done better by a dime. 

With UCO bouncing higher so much in the past 24 hours and my strike ending up a dollar higher than I originally planned, I decided to only sell four puts instead of six.  I thought it wiser to leave more room to add to my position if oil comes down again before expiration which is fairly likely with over six weeks remaining before December expiry.  I thought about selling the November options, but figured I could use the higher premiums offered four weeks later and expect volatility to continue to be high.  I finally decided on the $13 strike for two reasons.  I wanted the higher premium and thought I could afford the risk with less than $5,000 on the line.  Also, if the recent price history for UCO is any reflection of how future prices might play out, the $13.00 area looks like a good point of support.  The premium gives me a cushion below that and if UCO drops below $12.00 again, I’ll probably sell an options straddle on it to potentially add to my position at a lower price while taking in premiums on both sides.

I’m around 70% invested.  That means I have close to $26,500 that isn’t spoken for if all of my options are assigned at their strikes and I dump my bonds at their current prices.  My plan when I started to get more heavily invested was to let this fairly diversified portfolio be my standard and if it sinks I treat it with a more passive stance and don’t chase it with covered calls, much.  I’m basing that on my belief that the downside risk isn’t huge right now.  We could get another 5-10% to the downside from here, but if I don’t panic I’ll be able to ride it back up when the time comes.  In addition, when I believe another short term low is in I still have room to add larger positions to this account.  Since I went with three ETFs that attempt to double the daily performance of their respective indexes I am now running at close to a beta of 1.0 in my account when compared to the S&P 500.  That was good when the markets were going up, but now – not so much.  At some point (hopefully soon) I’ll start to sell new naked puts, but don’t plan to take the option assignments on all, if any, of the ones that fall below their strikes.  I want to avoid going on margin in this fickle market, but plan to open myself up to more risk again as the market works some kinks out of its system.  We all knew a down month was due.  The question yet to be answered is if it’s the start of a double dip or just a healthy correction.  I’m leaning towards the latter.

My returns when compared against the major indexes are mixed.  I’m ahead of the Dow by a little, below the S&P by about the same amount and trailing the rest.  My conservative approach for most of the year appears to be costing me my ”win” against most of the indexes, but that was a conscience decision I made based on how tenuous my job was for half of the year.  Here’s exactly how I compare to the major indexes. 

My 1 year return: 7.31%
Year to date (YTD): 15.82%
Annualized return since 4/8/07 (my blog’s beginning): -15.33%
Deposits for month: None for October

According to Morningstar, here’s how the major indexes have done over the past year and the current year to date (YTD):

Dow Jones Return: +7.71% 1 year,  +13.65% YTD
NASDAQ Composite Return: +18.84% 1 year, +29.68% YTD
Russell 2000: +6.46% 1 year, +14.12% YTD
S&P 500 Return: +9.80% 1 year, +17.05% YTD
S&P Midcap 400: +18.18% 1 year, +24.23% YTD

The VIX ended the month at 30.69 and the VXN ended at 29.81.  Both are up substantially from their lows a couple of weeks ago.  Selling options gets to be worth more at these levels, but one has to wonder if all the risk is priced in yet.  With volatility higher recently, options’ prices are higher.  Since I plan to take option assignments on what I have short right now that doesn’t bother me.  Actually, I see it as a benefit for any new options I plan to sell.  The next three weeks leading up to November options expiration will be interesting for sure.