Swing Trade It: The Fusion of Technical and Analytical Stock Trading

Blind Squirrel Forex Trading System

2012-03-02T19:23:00.027-05:00

Wow, I haven't posted on this thing in forever. For whatever reason, I've had more people e-mailing me now than ever asking where I am, looking to buy advertising space and offering me free iPad applications.

To cut to the chase, I've moved on to the wonderful world of Forex trading. My overall view of the United States economy hasn't changed since my last post on February 24, 2009. I'll probably modify this blog at some point to meet the needs of my new found interest. With all of the deficit spending, negative GDP growth, 9% inflation, and trade deficit, I don't see anything worth investing in this country at the moment which doesn't have a broad overseas market.

For any investors out there, I'd suggest staying outside of the United States with investing. Once the world realizes that we're in worse shape than Greece, our day of reckoning will come. The U.S. Dollar will collapse, and we'll either have double digit inflation to the tune of 15%-25% to pay off all of this debt we're incurring, or government services will be cut drastically while taxes remain high. Either way, I see things getting much worse before they get better -- but it's a pill we need to swallow for having the government officials we've elected.

For the casual drive-by who finds me on Google, the indicator below isn't for sale. I'm writing this post because it's a whole lot easier to write a post than it is to e-mail tons of screenshots and try to explain everything in such a medium. You can ignore some of the stop loss suggestions, as I'm still working to optimize it, and it's currently only working correctly for 1.x currency a pairs anyway. I'm still very new to MQL4 programming.

Note that all these charts show is the trend which the system is trying to predict -- the system actually attempts to predict places to scalp within that the trend it finds. This is all based off of a complex branch of mathematics known as non-linear dynamics in my attempt to turn the subjective system known as the Elliott Wave into math.

Here are some charts from this past week showing results. To start off, I would like to prove to you that this isn't a system based on lagging indicators, and it's all futuristic prediction. Watch me get crushed on the highly volatile 1M charts. For added effect, I put a MACD histogram at the bottom of the chat showing MACD win in only ways MACD can (click to make images larger):

Before getting to the fun stuff, keep in mind that this is just showing the trend, and not the individual trades which would be made within the trend. Also, any large moves due to news against the trend would've been stopped out which isn't noted by the arrows -- see the USD/JPY chart on February 29, 2012 for an example of what I'm referring to.

Judging by the system's accuracy with stopping out of trades early, I think I can even tighten up the stop loss even more. Some charts are more impressive than others, but I'm still in very early phases of testing out my new strategy.

EURUSD 1H:

USDJPY:
GBPUSD:
USDCHF:
USDCAD:
Some charts were more successful than others, but this is very much a work in progress. You can ignore the stop loss suggestions on the right side for the USD/JPY currency pair... I'm still just learning MQL4 programming. For the other pairs I was also in the middle of changing my mandatory stop loss of 30.0 pips to 25.0 pips, so the risk management is slightly off. Keep in mind that this system tries to snipe positions within a trend, but this indicator above displays what it believes that trend is.

I have designed this in such a way knowing that there will probably be more losses than wins, but the point is to ride out winners while cutting losses at the first indication while I let the winners run. The number of losses on 15M charts can be quite frightening at times in choppy markets, but it appears to still be profitable there as well as long as I avoid these choppy moments.

New Deal; New Depression

2009-02-24T23:52:00.007-05:00

I got bored with blogging, mostly out of depression for the overall state of the United States economy. I don't see anything positive happening in the near future, or even for perhaps the next 8-10 years. It looks like I'm pretty accurate to the overall state of the economy with my last post a little under 1 1/2 years ago, but since I'm here, I would like to make a revision:

Due to Barack Obama and Congress' F- rating in knowledge of economics, I will need to revise my low number for the DOW during this economic crisis.

I now predict that the DOW won't hit a low for somewhere in a 6-10 year span as a best case scenario and be somewhere between 6,000 and 7,000 points. The only fortunate thing to this is that by the end of Obama's term, the economy will be in such rough shape that he'll never get re-elected.

Are there any economists out there who are willing to run for president who actually believe in the idea of doing away with this ponzi scheme economy and letting the free market decide interest rates? How about someone who will cut taxes and drastically lower the size of the federal government? It's the only way out of this mess, and soon enough we'll figure it out.

We are far from the bottom of as some have told you...

2007-11-24T10:01:00.002-05:00

At this point I only see the markets going down further, with a decline to at least 7,000 points and perhaps much more.

George Bush has been a terribly upsetting president and is leading us down the road to where Herbert Hoover did when he tried to deal with the oncoming Great Depression. I have a difficult time believing that a fiscally conservative Republican will win in the oncoming election, which will mean more spending in the upcoming years when in fact, we need the opposite. This will lead us to another FDR or another “New Deal.” And even Henry Morgenthau admitted that the New Deal didn’t work in 1939 after the unemployment statistics came out.

Perhaps someone will read this, do their research, and realize the failure that FDR was as a president before it is too late. Historians tells us that Harry Truman did nothing which lead us to the Great Depression, but that couldn’t be further from the truth. In many ways Herbert Hoover was like George Bush in that he was very much anti-capitalism, which isn’t the spin you hear today. He played with the economy too much with stimulus / bailout packages.

If the government wants to act, it needs to act by getting rid of the Federal Reserve System and let the free market decide interest rates. By the federal reserve allowing interest rates to be below what the free market would set them, it creates and artificial bubble in the economy. This kind of bubble never works because it’s run as a Ponzi scheme, and currently we’re living with a Ponzi economy.

The government continuing to play around, spend more and coming up with all of these creative “stimulus packages,” is bringing us closer to an unmitigated disaster. Things will get worse regardless, but the only short-term fix would be to drastically cut spending, cut taxes significantly, do away with the Federal Reserve and run budget surpluses. If you look at the depression of 1920, Calvin Coolidge employed many of these tactics, and they worked.

Eventually the Federal Reserve will find themselves in a corner where they need to raise interest rates aggressively, despite the fact that the economy is falling. If the Federal Reserve fails to act, then we’re headed for a time of hyperinflation only seen in areas of Latin America.

Bottom Line: We got into this mess by borrowing to much money, spending too much money, inflating too much and rejecting the idea of sound money. You need to allow the recovery to take place -- the government will only make it worse. If the government continues to play with the economy, the bond market will eventually go under (probably sometime in 2010-2011), the dollar will eventually roll over and collapse, and we’ll be in an area of hyper-inflation.

Perhaps a year or two down the road we’ll all be living in a utopia and this will look foolish, but if not, maybe a historian will somehow come across this and start to realize the “New Deal,” was a failure that FDR gave us instead of the Kool-Aid they’ve been fed. You can look at GDP all you want, but GDP isn’t an accurate representation of the economy because it includes government spending and doesn’t take inflation into account.

The Sky Is Falling

2007-11-08T20:03:00.000-05:00

Did anyone else see that implosion today on the technology sector? I think someone overlooked Apple’s 2 million sales of the Leopard operating system. Or did they?

The markets typically work out planning about 6 months in advance so perhaps this little slump hit the technology sector within that time span. Being that it was growth that was spoken against today, it would make sense that it would be the largest growing companies that would take the largest hit.

So what now? The last news on inflation (wage increase being the biggest one) gave us no reason to believe we are headed for inflation which is good news. This all but clears that way for the Federal Reserve to cut interest rates by another 25 or 50 basis points.

A large reason for the drop was due to poor GM earnings which were expected. The odd thing is that GM seems to always go down on earnings whether it is good or bad. People still view GM as a major backbone of this economy and that lead to the major downfall so far this week (not that Bernanke helped it any).

Not Even ExxonMobil (XOM) Can Handle High Oil Prices

2007-11-03T22:32:00.000-05:00

ExxonMobil (XOM) has closed below the lower band by 0.8% hinting that a downside breakout is possible. The Bollinger Bands are 14.5% wider than normal. The current width of the bands alone does not suggest anything conclusive about the future volatility or movement of prices but last Thursday we saw Exxon break it's level of support around $90.50 giving support to this theory.

At this point I see the stock headed downward to around $85 before it can start picking up steam once more. The good economic news didn't do anything to strength the US dollar last Friday so don't expect anything positive on that end anytime soon. Since the US dollar and oil prices are directly tied together, don't be surprised if we oil rise even further.

Ok, so I'm finally in on Google...

2007-11-02T22:07:00.000-05:00

Or perhaps Google is a better way to put it. In any case, I saw this stock at $200 and said it was too expensive. I saw it at $300, $400, $500 and still thought it was too expensive to pick up. Before I knew it, Google hit $700 and it was still too expensive for my liking.

All of a sudden, Google at $200 isn't looking too bad! So to cut a long story short, I just couldn't help but to get in. Lets face it, advertising isn't going away and with Google looking to get into the wireless game, who knows where they'll end up.

I was watching CNBC this afternoon around 3:00 PM EST and Jim Cramer said something about looking at the financial data and pending on how you look at it, Google is a relatively cheap stock at $700 and might be a $1200 stock. I personally think that if Google is trying to take over the world, I might as well have a stake in it.

Stock Brokerages

2007-10-27T15:17:00.000-05:00

I might be looking for one but I haven’t decided yet. If you’ve been reading me for a while, you know that I use Zecco now. I’ve used Zecco for a while and have loved them dearly but recently they’ve employed this bait & switch technique to their most loyal customers.

Instead of getting 40 free trades a month and $3.50 there after, it’s now 10 free trades a month and $4.50 thereafter. In order to get 10 free trades, you need to have an account balance of $2,500. The minimum balance makes perfect sense to me, you can't make money giving free trades on someone trading penny stocks with only $1 in their account. I could perhaps see them even raising this to $5,000 or $10,000, but I don't see how you can say you have the same "free trade" policy when you're now 75% less free than before.

The balance is no problem for me, but I’m not sure how Zecco can continue like this. Large brokers such as Bank of America offer 30 free trades a month for a $25,000 account balance. So Zecco is after the smaller guy while Bank of America wants the people with the big bucks. Personally, I think there’s a lot more money to be made with people that have $25,000+ accounts instead of $2,500 - $25,000 range.

I haven’t been one of the more vocal in the Zecco community to show displeasure to this pricing change as I believe Zecco should be able to do whatever they want. I’m not going to complain, but I don’t see this being a practical business model and I am as "free" to leave as everyone else is.

If I go to Bank of America and raise my account to $25,000 I’ll have 30 free trades and clear to have pattern day trader status… which is a good thing. If I stay on Zecco I can have 10 free trades a month and $4.50 thereafter but keep a low valued account (<$10,000). I can go to a deep discount brokerage like MB Trading and just pay a $1/trade flat out. Or I can say with my original brokerage, Scottrade, and pay $7/trade and get great fills.

Decisions, decisions…

Slow Week On Wall Street As Fed Nears Interest Rate Decision

2007-10-27T14:47:00.000-05:00

Home builders were up huge last week after CFC announced that better times were ahead of them. Also, we saw Halliburton pull back after taking a punch last week as I previously expected. Some skeptics thought the price of oil was about to take a tumble but as I noted here, the price of oil is traded in dollars... not yen, not yawn... dollars. If the value of the dollar continues to go down, why should we expect anything but the price of oil to go up?

Here is another daily chart of Apple (AAPL). The first carrot was at a volume spike on negative volume. I was skeptical as far as what Apple would do considering that it it went up a little bit at a time on very little volume. Now we see the latest volume spike on Apple's latest earnings which is good news for Apple stock.

I took this time to buy more Apple before close on Friday seeing only good things ahead (and the release of Leopard). We have first Euro iPhone sales coming out next month I believe. In December we have Christmas sales and soon after we have Mac World where they always announce a new product. No one knows how to hype a product like Steve Jobs so hopefully my latest buy-in will pay dividends shortly. I would like to see Apple in the lower 200's sometime February next year.

Some people look forward to Halloween for candy, but me, I'm looking forward to seeing what Ben Bernanke has in for us (October 31st) this should be an interesting one.

Stocks For Next Week

2007-10-19T21:22:00.000-05:00

I started scanning over several stocks on both the NYSE and NASDAQ looking for buying and selling signals. It didn't take too long before I realized that several stocks triggered a downtrend due to the massive sell off last week.

In any case, here are a few that I came up with before I halted my list. On days such as last Friday, I would look more at the stocks which trigger a buy due to their ability to break a severely down-trending market.

On Thursdays, I plan on posting buy and sell signals for securities. It's a lot of work, but it's worth it because Friday, I believe, is a good day to pick up on stocks which are starting to trend (and that people will pick up on Monday morning). I was once told never to create a new position on Fridays but I don't believe this person is trading anymore.

Buy Signals: ANH, ANN, ASX, AWRE

Short Signals: AB, ABCB, AEC, AINV, ALEX, ALK, ALTH, ANST, ANSW, AOI, ATB, ATO, ATV, AVB, AVRX, AXA, AYN, AZ, AZZ, BABY, BANR, BBSI, BDN, BDV, BEBE, BECN, BEZ, BFF, BFIN, BKD, BKH, BMD, BRE, BXP, CAL

Happy Black Monday

2007-10-19T17:26:00.000-05:00

Well maybe it's not so happy if you're like me and picked up Halliburton (HAL) yesterday only to see it plummet today. It's ok though, because I like Halliburton even more at these lower price levels. As we all know, oil prices are sky high but as we don't know, Halliburton has earnings coming out before the opening bell on Monday. I'm a little concerned considering the insider trading going on, but I still consider Halliburton to be a good company with a lot of potential upside.

In case you didn't know, this is the 20th anniversary of the black Monday crash. If you're here wondering why the markets tanked, that's really the only reason which I can find. I'm sure there was some profit taking within some companies, but as a whole, it was mainly out of CNBC causing a free fall. Come Monday, I'm sure you'll see the market recover some on some sectors, particularly computer hardware.

We had a rough day today on Wall Street, but keep in mind that it's never as bad as it looks when things are bad; and it's never as good as it looks when things are good. I hope you didn't exit many of your longer-term positions today (unless they hit a stop - in that case, good for you). But if you liked Halliburton at $41, you should like it even more at these price levels.

Bottom Line: There was no real reason for the markets to take a jab like they did today, with the exception of CNBC talking about recession the entire day. On days where there is no bad news and the markets are in a free fall, it's usually a good time to look at picking up someone of the stronger companies that pulled back due to profit taking as these will be the first to recover when the market does. I expect early next week to see some recovery on short coverings.

Software for Assessing Risk in the Stock Market

2007-10-17T19:16:00.000-05:00

So for the time being you've had your total portfolio sitting there willing to risk but a certain percentage on a certain stock. You have a good idea of what you want your stop price to be; however, you also notice that your stop price percentage is different from the total amount that you're willing to lose.

For example, you have a stock that is valued at $10/share. You have a good feeling that if the stock loses $9, it will be in a total free fall and it's all down hill from there. You have a total portfolio of $10,000, but you don't want to lose more than 5% of your total portfolio on a certain security.

Well, if you invested all $10,000 in that security, you would be risking a 10% loss if you let the stock slip from $10 to $9 (where you thought the stock lost support). So what you really want to do, is risk only $5,000 of that $10,000 portfolio. This was actually a really easy math equation because the numbers are easy and we can do those in our head without problem. But what about when you have a portfolio of $17,420 and you have a stock at $17.63 and you find support at $16.74 wanting to lose only 1.5% of your overall portfolio on that security?

This is why I created my Stock Risk Management application. You can download this little utility free of charge by scrolling down the right side of this page and click on the link. There is no charge, but if you want to pay off my car payment, student loans, buy me a house... Ferrari... you're free to do so. :)

Testing Shorts in Prudential (PRU) and Toll Brothers (TOL) Ahead of News

2007-10-16T17:03:00.000-05:00

I have short positions in Prudential (PRU) and Toll Brothers (TOL) ahead of the economic news dealing with housing starts and the consumer price index coming out tomorrow.

As predicted earlier and post on October 8th, Apple (AAPL) has officially announced that their new operating system, Leopard, will be released on October 26th sending the stock up about 2.7%. I remain bullish on Apple going into the holidays and plan on buying more shares at some point in the near future on the next sign of slippage.

In after hours, we're seeing tech stocks go higher lead by the earnings of IBM (IBM), Intel (INTC) and Yahoo (YHOO). It should be interesting to see what kind of a day we're in for tomorrow. Several people expect weak economic news but with the drive in the tech sector, we might see a bit of a clash between the NYSE and NASDAQ.

Looking ahead to the week of Ocotober 15th 2007

2007-10-15T06:22:00.000-05:00

Events for October 15 - October 19
10/16/2007: Industrial Production, Capacity Utilization
10/17/2007: CPI, Core CPI, Housing Starts, Crude Inventories
10/18/2007: Leading Indicators

Ex-Dividend Dates for October 15 - October 19
10/15/2007: EOG Resources (EOG), General Growth Properties (GGP), Morgan Stanley (MSJ),
10/16/2007: N/A
10/17/2007: Lowe's (LOW), Perkin Elmer (PKI), Procter & Gamble (PG)
10/18/2007: Apache (APA), C.R. Bard (BCR), Caterpillar (CAT), CVS Caremark (CVS)
10/19/2007: N/A

Confirmed Earnings for October 15 - October 19
10/15/2007: Citigroup (C), Eaton (ETN), Mattel (MAT)
10/16/2007: Forest Laboratories (FRX), Intel (INTC), IBM (IBM), Johnson & Johnson (JNJ), KeyCorp (KEY), Linear (LLTC), Regions Financial (RF), U.S. Bancorp (USB), Wells Fargo & Company (WFC)
10/17/2007: Abbott Laboratories (ABT), Altria Group (MO), Citrix Systems (CTXS), Comerica (CMA), E*Trade (ETFC), eBay (EBAY), J.P. Morgan Chase (JPM), Northern Trust (NTRS), Sovereign Bancopr (SPTN), Allstate (ALL), Coca-Cola (KO), United Technologies (UTX), Washington Mutual (WM)
10/18/2007: Advanced Micro Devices (AMD), American Standard (ASD), Bank of America (BAC), Capital One Financial Corp. (COF), Dow Jones & Co (DJ), Eli Lilly (LLY), Google (GOOG), Pfizer (PFE), SanDisk (SNDK), Southwest Airlines (LUV), The Hershey Company (HSY), The McGraw Hill Companies (MHP)
10/19/2007: 3M Company (MMM), Boston Scientific (BSX), Caterpillar (CAT), Harley-Davidson (HOG), Honeywell (HON), Wachovia (WB), Xerox (XRX)

US Dollar Depreciating in Value

2007-10-14T01:44:00.000-05:00

Here are a couple of interesting charts to look at. The first chart is the value of the US dollar and the second chart is of the Dow Jones Industrial Average, both charts ranging from 2000 up until early October of 2007.

I throw this subject out there for the people who are worried about the US economy while the dollar continues to go to shambles. Firstly, I think that this is a low point in the value of the dollar and it will rise; now however, we are in very interesting times. As the value of the US dollar decreases, we are seeing record exports to foreign countries. These record exports are turning into profits for companies and in turn going in the pockets of traders, 401ks, 403bs, ROTH IRAs and other investors in the US economy.

So how did this all happen to begin with? A lot of people blame the president, and they couldn't be any more misguided nor uneducated. The fact of the matter is that no matter who the president is, they really have very little control over anything monetary in this country (which is probably a good thing). Do you recall how Bernanke didn't cut interest rates for more than a year? Well, now a lot of foreign money has come pouring into US treasuries and bonds and the US dollar isn't worth as much - now we're paying all of these off which is leading to a decrease in the national debt.

So this is all great right? Well, you really need to look at things from all angles before coming to any conclusion. Oil is traded and paid for in dollars, but middle eastern companies spend their money in Europe. If the middle eastern companies get a bad rate when they convert the dollar into Euros/Pounds, they will have to charge more for their oil to get an equal exchange in Europe. Since World War II, the dollar/oil has dominated the global economic market. With high oil prices due to a weak dollar, I think this is where the interesting times come in to play...

Has anyone looked into companies that produce solar power recently? If I'm wrong, and the US dollar hasn't reached it's bottom while oil continues to rise, I think we'll have a lot of innovation in the future perhaps putting the middle east out of business. I don't see this being a bad thing for either the global market nor the environment and quite frankly, it's about time. A lot of skeptics out there believe that somehow big business monopolies in the oil market will find a way to suppress innovation and keep oil a necessity in our economy. I wonder if these people are the same ones that are still using America Online as a dial up provider...

Inflationary Worries.... OMG!?!

2007-10-11T15:22:00.000-05:00

By now you've already heard about this enough that you're sick of it I'm sure. Like most everyone else, you come to me for commentary and not the fine (boring) details of the matter.

My post from a couple days ago has some validity to it now. Apple shook a lot harder than a lot of other companies losing around 6% from their high at one point earlier in the day before pulling back. I am still rather bullish on Apple going into the holiday season no less.

My take on the whole matter is that if the fed decides not to cut interest, it won't matter a whole lot for certain sectors. Home builders, mortgage companies and other companies directly effected by the housing market will take a pinch I'm sure. But with the weak U.S. dollar, I believe that foreign sales will end up being higher than in previous years which in all likelihood will mean good things going into the holiday season for retail.

Oil is a commodity also less likely to suffer keeping the interest rates where they are. The summer season is over so people aren't going to cut back on travel. You still need to get to where you're going, heat your home among other things. I believe it is for this among other reasons why Halliburton (HAL) continued to remain above par despite the bad news coming today.

S&P 500 Closes At All Time High

2007-10-09T16:19:00.000-05:00

Both the Dow and S&P 500 reached record highs today on a hint from the fed that they're not done cutting interest rates yet.

I remain cautious on days such as this because investors often times over-react to good news as they do to bad new. I expect a slight pull back tomorrow sometime between 11:30AM and 2:00PM EST before the buyers are back in charge. I don't expect any significant drop in value of the S&P 500 anytime between here and the end of the holiday season and remain bullish mid-term.

Likewise, I am short on a small position going into close but am covering myself with a stop loss around 1% anticipating a mild sell-off for price correction and profit taking from today. Mid-term, I plan on making some conservative moves buying into the S&P 500 leading into the next federal reserve policy meeting on October 31st. November hasn't historically been one of the best months for the S&P 500, but amidst some of the events going on, this might end up worth investing in.

I believe that now is a good time for the more conservative investors to start shifting out of savings accounts and into stocks. Take note as to how I said shift, I think dumping everything in all at once is a very bad investment decision. If you're looking to trade that's one thing, but an investment should be shifted in for dollar cost averaging reasons.

The chart on the right shows a breakdown month by month of the S&P 500's past performance.

Apple's (AAPL) Set To Release New OS

2007-10-08T13:10:00.000-05:00

Rumor has it, Apple is set to release their new operating system, 10.5 (Leopard), on or around Friday, October 26. Later, we'll be seeing sales of the iPhone in Europe and holiday sales in December - January.

It seems like this is a bullish time period for Apple. Currently the only thing that bothers me about Apple is the weak volume on the stock. As you can see, the last real spike in volume came on a downward trend for Apple and we're currently rising on weak volume.

I'm not sure exactly what to make of this one. On one hand I see a lot of good things happening for Apple as previously mentioned, but on the other I look at the chart and shrug my shoulders. Perhaps we'll see green volume spikes after Leopard and iPhone sales while it rises cautiously now.

The iPhone is destined to fail in Canada however, and perhaps not a lot of people know this. Rogers is the only GSM provider in Canada and they charge exorbitant data rates. Here in the United States, you can get a good unlimited data plan for about $20/month and the iPhone for about $399 with a fee of $59/month with all the bells in whistles. In Canada, as the Loonie is near parity with the USD, they're looking at a much more costly iPhone and an monthly fee of hundreds of dollars a month.

Looking ahead to the week of October 8th, 2007

2007-10-07T02:55:00.000-05:00

Events for October 8 - October 12
10/10/2007: Crude Inventories
10/11/2007: Initial Claims, Trade Balance
10/12/2007: Retail Sales, PPI

Ex-Dividend Dates for October 8 - October 12
10/09/2007: Bank of America (BAC), National City (NCC)
10/10/2007: BB&T (BBT), Genworth Financial (GNW), Morgan Stanley (MS), Pitney Bowes (PBI), PNC Financial Services Group (PNC), Vornado Reality (VNO), Whole Foods Market (WFMI)
10/11/2007: Abbott Laboratories (ABT), Citigroup (C), Marsh & McLennan Companies (MMC), Wm. Wrigley Jr. Co. (WWY)
10/12/2007: Bear Stearns (BSD), Gap Inc. (GPS)

Confirmed Earnings for October 8 - October 12
10/8/2007: Yum! Brands (YUM)
10/9/2007: Alcoa Inc (AA)
10/10/2007: Costco (COST), Host Hotels & Resorts (HST), Monsanto Company (MON)
10/11/2007: M&T Bank (MTB), Pepsi (PEP), Safeway (SWY), SLM Corp (SLM)

Strong Week For Home Construction

2007-10-06T20:05:00.000-05:00

Home construction lead the way for a very positive week on the markets. 10 stocks in this industry shared double digit gains with Meritage Homes (MTH), Ryland Group (RYL) and KB Home (KBH) leading the sector with gains of 22.17%, 18.01% and 17.32% respectively.

The job report which came out Friday was very positive for the markets. CNBC analysts believe this was a good enough report to fight off recession, but not so good that the feds wouldn't consider lowing interest rates. My personal belief is that the economy is strong and the federal reserve is done cutting interest rate for the time being. This could mean home builders will be pulling back a bit after the next federal open market committee statement on October 31st.

I believe we will see a cutback in the housing / mortgage market next week after showing strong gains for no fundamental reason. Beazer Homes (BZH), WCI Communities (WCI) and Standard Pacific Corp (SPF) are the cheapest stocks in this sector if you're looking for make quick high percentage gains. Computer Hardware was the leading sector last Friday so I'm curious to see if it will continue it's bullish run or if we will see a slight cutback / profit taking.

CARDICA, INC. (CRDC)

2007-10-05T20:05:00.000-05:00

This really is an amazing little company that not many people know about. The system this company developed is called the C-Port Flex Anastomosis System. I'm sure they spent just as much time coming up with a name as they did the procedure it performs -- a closed-chested heart bypass surgery.

I originally heard about this company earlier this month when they had come out with the innovative procedure for heart bypasses. I thought a lot of it at the time, but never bought into the company. I kind of forgot about the company for a little bit until we saw it start to run into close on Thursday. I saw that the stock was up quite a bit without any news that day so I was considering a short - thankfully it never got filled as the stock continued to soar.

I looked into Cardica again only to find out it was that little $5 stock that I was reading about earlier in the month which was only up 70% at the time. Now, a few days later, we're looking at roughly a 240% gain. Cardica recently showed up at a small cap growth stock conference and they're really showing a lot of promise going into the future.

Zecco "Free Online Trading" Starts to Lose It’s Appeal

2007-10-01T16:10:00.000-05:00

Not that it has lost its appeal to the average investor who trade less than 10 times/month, but to those of us active traders, it most certainly has. Perhaps it will be one of you 537 viewers out there (at least according to my statistics) will be able to speak reasonably to knock the commissions down for active traders.

For those of you active traders out there on TradeStation testing new ideas on Zecco with small accounts, you will probably be testing even less now.Our current $0.01/share trades on TradeStation are far less than $4.50/trade. I was hoping to close down my other account after Zecco came up with a slick platform but now it doesn’t look like that will be happening. Personally, I’d rather keep the $100/month data feed eSignal provides and get my own data rather than pay $4.50/trade. Zecco is still a pretty slick deal for those of you investing (as opposed to trading), but to those of us actively trading... it's a little pricy.

This reminds me of the old Scottrade days where I used to trade for $7/trade. Such a painful thought for non-millionaires. There is a good side to this however.

I'll need to work on my new theories even more now than ever as I have until the end of December to fine-tune everything to get back up to par. I’m not sure if I'll stay with Zecco after the new price changes go into effect but TradeStation's $1/trades sounds awfully appealing at this point. Hopefully you’ll be hearing from me a lot more between now and then.

If I leave it won't be on bad terms. I've always found their staff to be helpful, but I find that they simply don't meet my needs anymore. A trading platform would be nice, but I didn't join for a nice trading platform.

GM Strike Ends

2007-09-26T18:29:00.000-05:00

I've had some really bad trades this week. It started with shorting CCU (Clear Channel Communications) and then minutes after they announced a potential buyout offer.

The next day I shorted GM anticipating an extended strike. I was planning on buying to cover the next day but then they announced the strike was over. Don't these union workers know how to fight for anything anymore? Oh well, live an learn. I've had my ups and downs before and this has been a downer for me.

I think I might set up some guidelines for myself to try and hold stocks for a longer period of time while I continue to engineer this new form of trading I'm trying to get into. I find myself trying to day trade stocks when I really want to swing. So for example, if a stock is trading above it's 200 DMA and it doesn't have bad news, I won't allow myself to sell it for at least 24 hours. I think this might get me in the mindset of holding a stock for more than an hour or two. Stocks that have positive divergence (MACD) and above 200 DMA you usually don't need to worry about short term anyway.

I won't count these two trades against my new philosophy since I believe it to be more of a bad luck streak than anything.

Fed Slashes Rates by 50 Basis Points

2007-09-19T05:55:00.000-05:00

I'll start off by being a critic and say this is ridiculous right from the start.

I don't think it's the federal reserve's role to watch the backs of businesses who give out loans irresponsibly to people who cannot afford to pay them back. Nor do I think it's the role of the federal reserve to cover for the people who take out those loans (irresponsibly) whom cannot afford to pay them back. I wish Bernanke had stood up to the big mouths on television (Cramer in particular) and kept things where they were.

Can you imagine what would've happened had the federal government decided to step in and save all of these tech companies from losing value so investors wouldn't lose their cash? Ridiculous. Cramer should keep his mouth shut and the government should let companies go under (specifically airlines) and let companies and individuals take responsibility for their actions.

Looking ahead to the week of September 17th, 2007

2007-09-15T21:09:00.000-05:00

First, here are the movers and shakers by industry for the past week:

Events for September 17 - September 21
9/17/2007: Producer Price Index
9/18/2007: Federal Reserve policy meeting
9/19/2007: Consumer Price Index, Crude Inventories, Housing Starts
9/20/2007: Leading Indicators

X-Dividend Dates for September 17 - September 21
9/17/2007: DTE
9/18/2007: IFF, OMC, SNV, TIF
9/19/2007: ATI, CB, CINF, HNZ, MBI, TROW
9/20/2007: DDR, GE
9/21/2007: PHM

Picked Up Alcoa Inc. (AA)

2007-09-14T15:28:00.000-05:00

Today Alcoa announced a regular quarterly dividend of 14 cents per share. Alcoa was also featured on Motley Fool as one of the top 4-star stocks. In after hours at this point the stock has dipped about 1% since my purchase price of $35.49 (apparently on profit taking) but we'll see what it does on Monday morning. I expect people who took the day off on Friday to be bidders on Alcoa from this news.