Monthly Archives: May 2010

Quick Update

Posted by Investing Freak on May 21, 2010
General / 10 Comments

I hope you all have been enjoying the profits these past few weeks.

To the followers of InvestingFreak’s Current Picks I thank you for your support and I hope the $SPX April 27th Sell signal (along with the other symbols) made you some good money especially if you traded SPY puts. As Shown Below the market has corrected over 10% since then and there still no buy signal.

We now have a  Button on the right hand side.

To those that have already donated we would like to Thank You! for helping us pay the hosting bills. We hope you continue to enjoy the content on this site.

Lastly I would like to inform you that there won’t be any updates from May 22 to June 1st because even Freaks need to take breaks.

Make some money next week and donate 10% to us. ūüėČ

-K

Germany Tries to save the day AGAIN -2008 Part 2 Begins-

Posted by Investing Freak on May 18, 2010
Market Analysis / 2 Comments

So today Germany’s Merkel decided to pull a good trick over the nekkid shorts.

There is much surprise that the German government has declared a ban on naked short selling, including CDS, as of midnight tonight, with no prior notice or the niceties demanded by the banks when government chooses to act. This action seems to have perturbed some and confused many.

Germany is claiming that this move will stop the Speculators

The ban will also apply to naked short selling in shares of 10 banks and insurers that will last until March 31, 2011, German financial regulator BaFin said today in an e-mailed statement. The step was needed because of ‚Äúexceptional volatility‚ÄĚ in euro-area bonds, the regulator said.

HMMM Where oh Where Have I heard this story before… ¬†Oh Yeahh.. September 20, 2008 German regulator bans short-selling in financial stocks

Germany on Saturday halted short-selling in financial shares, when investors borrow company stock to sell it, following the example of Britain and the United States. The ban affects 11 shares including those of AAreal Bank, Allianz, AMB Generali, Commerzbank, Deutsche Bank, Deutsche Boerse, Deutsche Postbank, Hannover Re, Hypo Real Estate, MLP and Munich Re.    BaFin, said short sales were banned with immediate effect until the end of the year, underscoring that they could lead to huge losses in the current global financial turmoil.

Roll Back to May 18, 2010….

Allianz SE, Deutsche Bank AG, Commerzbank AG, Deutsche Boerse AG, Deutsche Postbank AG, Muenchener Rueckversicherungs AG, Hannover Rueckversicherungs AG, Generali Deutschland Holding AG, MLP AG and Aareal Bank AG are covered by the short-selling ban. ¬†¬†‚ÄúMassive‚ÄĚ short-selling was leading to excessive price movements which ‚Äúcould endanger the stability of the entire financial system,‚ÄĚ BaFin said in the statement.

I wonder what happened last time they tried protecting the banks? Well I will examine it below but what’s that I hear you say? This Time is Different? ¬†It sure is!!
During the last Crisis we had Lehman go bankrupt and Bear Stearns collapse. ¬†Two years later we don’t have any financial institutions going down. We Have Countries that are crumbling and their “shareholders” (taxpayers and citizens) revolting. ¬† ¬†Greece is Bear Stearns because of the trillion dollar bailout and Portugal might as well become Lehman because unless Europe is willing to print a trillion for every country they bail (which I know they can if they want) and euro dropping to parity and beyond with the dollar…. someone will have to hold the bankruptcy stick.

Anyways Lets look at how the last short selling ban affected the financial institutions they tried to protect.

I’m using Dow Jones Germany Index for a Benchmark as to compare returns.

Company Sept to Dec 2008 May 2010 ‚Äď March 2011
Dow Jones Germany Index (USD) DEDOWD -23% TO
Allianz SE  AVL -30% BE
Aareal Bank AG ARL -64% FILLED
Commerzbank AG CBK -61% OUT
Deutsche Bank AG  DBK -50% ON
Deutsche Boerse AG DB1 -15% APRIL
Deutsche Postbank AG DPB -65% 2011
Hannover Rueckversicherung AG HNR1 -18% WHEN
MLP AG MLP -26% BAN
Muenchener Rueckversicherungs-Ges. AG MUV2 +7% ENDS

Oh myyyyyy Germany Saved the day as speculators were on the sidelines watching and missing out on 18 to 65% gains (its what you do when you short and if you’re not familiar just Google “selling stocks short”)

The Previous ban was 3 months and the protected stocks crashed an average of 46%. The New Ban will be around 11 months and will crash how much? It will crash aplenty so I will not make an exact percentage call on this one. But I will be doing one thing this time around though. ¬†I’m putting German Financials on a Bank Watch List that I will check back on April 1st 2011.

Make plenty of money these next few weeks even if my blogging is sporiadic at best. (Offline life always comes first)

-K

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Current Stock Signals 5-15-2010

Posted by Investing Freak on May 15, 2010
General / Comments Off on Current Stock Signals 5-15-2010

Due to my time constraints in the next two weeks I will be posting more sporadically.  Here are the current signals for symbols I follow.

You can also find this at the top on Current Picks Page.. I hadn’t updated it in two weeks but as you can see the major signals are from late April so nothing was missed.

My System caught onto the downdraft about a week before the “fat finger” occured and from what I just observed going through these charts is that the “fat finger” was very skinny and precise… nuff said because I need to keep this one a secret. Enjoy

Market Indices and other important Quotes
(Note: I understand you can’t purchase an index so bear with me these are just signals)

Symbol Buy Date Sell Date
$SPX 4-27-2010
$INDU 4-30-2010
$COMPX 4-30-2010
QQQQ 4-30-2010
IWM 5-12-2010
SPY 4-27-2010

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Rest of the Symbols (More will be added per request)

Symbol Buy Date Sell Date
IYR 5-14-2010
AAPL 5-4-2010
DRYS 4-19-2010
SDS 4-30-2010
SRS 5-14-2010
SSO 5-14-2010
SKF 4-30-2010
JNK 5-14-2010
HYG 5-14-2010
REW 4-27-2010
QID 4-30-2010
QLD 4-30-2010
XLF 4-26-2010
DIG 4-28-2010
DUG 5-14-2010
SMN 4-30-2010
VXX 4-27-2010
BBT 5-10-2010
BID 5-11-2010

Make Some Money… Ok A Lot of Money!
-K

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Special: Best Lesson Ever On How To Find Shares To Borrow of Stocks at Different Brokers

Posted by Kamil on May 10, 2010
General / 6 Comments

Let me just warn you that short selling is even more dangerous than buying (aka going long) stocks.

Why?

If you buy a 1000 shares of MCGI at 2.3, you will pay $2300 + commission. Thus, most you can lose is $2300 and there is no limit on your reward– it could go as high as $4, or $100 per share.

If you short sell a 1000 shares of MCGI at 2.3, you will pay $2300 + commission. Here is the catch: you bet that the price will go down, so THEORETICALLY you can only make 100% of your investment if the price will go down to $0 (zero, null, nada, nic, vlere). THE PROBLEM: the price of the stock can go up infinitely, so you can lose the value of your whole account if you are not being careful. I recommend to never, ever, under no circumstance, leave the short position open without you looking at the price action and being ready to pull the trigger within seconds. If you still do not understand what short selling is or are confused about something, please leave a comment with your question and I will do my best to answer it.

If you understand the risk of short selling, you are half way there. In order to short a stock, you need to borrow shares from your broker. Below is the list of some brokers and how I go about borrowing shares from them.

Thinkorswim: their platform will tell you whether given stock is easy to borrow or hard to borrow by showing you ETB or HTB in the top right corner of the quote window. If it is ETB, you can just execute sell order which is equivalent of shorting. If it is HTB, you have two options: call them or chat with them live on the website. I generally prefer to chat with them as it is the easiest and most convenient for me. I connect with Trade desk, and say “Hi, do you have a 1000 shares of MCGI to borrow?.” If they do not have shares, the person will say “none” or “none available.” If they are available, the person you are speaking with will ask you for your account # and the price you want your order to be placed. I usually would reply with “Set sell lmt order at $x.xx”” — I recommend to ALWAYS set your order higher than it is now at as sometimes it could take them 10 seconds and sometimes 2 minutes for your order to start working.

TD Ameritrade: there is no way to know whether the stock is short-able or not. You can try executing the sell order and it will either get executed or not. If not, you will be simply given an error message saying: rejected. Note that TD has implemented Thinkorswim’s software recently so it might be possible to know whether it is short-able or not. I personally have not used TD for a while; I never liked TD and their high commissions.

E-trade: tired them in the past. My experience has been negative (but maybe they changed since then?). Just like with TD, you can’t know whether it is short-able. You can try executing sell order and it will either be successful or rejected.

Sogotrade: You can know whether given stock is available to borrow by using this URL: http://www.gndt.com/support/shortlist.htm or simply calling them. The list is updated only once during a day so it is possible that shares of desired stock might be already borrowed and not available anymore. Generally speaking, in my experience, Sogotrade usually has shares to borrow of stocks you can’t find with other brokers. Don’t ask me why, I don’t know…

I will add more brokers if anyone is interested.

– Kamil

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Market Correction: Special Edition Results [Animated Charts]

Posted by Investing Freak on May 07, 2010
Market Analysis / 5 Comments

If you’ve been following my blog recently you might have noticed my April 28, 2010 “Special Edition: Here comes the red ink, correction begins.
On April 27th The SPX stood at 1183 and it swung as low as 1065 during the past 7 trading days to ultimately close at 1110.

As I wrote on the 28th

I finally had time to check on the market a big grin came to my face. A lot went on today and news blamed Greece and Portugal downgrades for the sharp drop. Nobody ever talks about the technical analysis because it is beyond the mind of Joe the Plumber.

The first chart was the EUR/USD which broke an ascending triangle on the daily back in December. ¬†Below is an animation of Apr 27 and May 7 to show the move. If you have trouble viewing the animated image please leave me a comment because it’s the first time I’m using animated content. (CLICK TO VIEW ANIMATION)

Next we’ll move onto the $TED Spread which jumped nearly 100 percent since the 28th. (Click to View Animation)

Lastly I will leave you off with the Investing Freak Special SPX chart animation. Boy was this a move, the red line is the 250 day moving average in case you are wondering. (Click to View Animation)

Where do I see us heading from here? We still¬†haven’t¬†broken some key supports such as the 1088 trendline and the 1060 250Day moving average. So if we drop another 50 point we will still be good to go for a bounce. If more crazy days are upon us? ¬†I will check with BID ( Sotheby’s ) to see if it’s gone below 22 to initiate heavy short positions.

Thats just me and as always these are my opinions and even though they work for me I cant guarantee them working for you.

Have a good weekend and be on the lookout for the latest Current Picks signal changes coming up this weekend.

-K

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Market Survives Heart Attack

Posted by Investing Freak on May 06, 2010
Market Analysis / 1 Comment

There is no need for me to summarize today’s DOW -1000 move so I will move ahead to the point of the day.

Quick Update to the post on April 28 Special Edition: Here comes the red ink, correction begins.
I want to talk about my leading market indicator ( Sotheby’s¬†¬†BID)
As Quoted from April 28’s article.

Now lets take a look domestically at ¬†BID – Sotherby’s ¬† which as I mentioned on¬†March 14th’s post is Part of my indicators arsenal. ¬†A move below 32 (20% drop from 39) would tell me to wipe the dust off my ammunition and a move under 22 (40+% drop) would just signal that Chaos is back and since this is a Leading indicator to me it would highly influence my positions.

What BID did today is move below 32 for most of the day so my ammunition is now dust free and waiting for the under 22 move if it comes.

Go to the link above to check the older chart (or click here) but here is the one updated today that shows you how BID bounced right on the trend-lines I had drawn a while back.  Since it bounced at 28 that to me signals that there is still a chance for survival from this heart attack.

Here’s the chart and I will stop here for the day. Tomorrow there should be a textbook green day with more red on the way for next week. (Click to Enlarge)

-K

Personal Journal: Option Play Record

Posted by Investing Freak on May 05, 2010
General / Comments Off on Personal Journal: Option Play Record

This option play netted me 570% which is my highest payout percentage wise.
To put in $33 and get out $188¬†isn’t¬†bad if i’m able to do it consistently.

There is no lesson to learn here this post per se¬†but if there was a lesson is “Stick to your plan”.
My plan was to see AAPL close the April 21st gap and that turned out to play well. I could have locked in 200% last Wednesday but I stuck to my target and ended up getting almost 3x as much as I would have in the past when I let emotions cut winners short.

230 AAPL May 2010 Put  (click to enlarge)

Till next time.

-K

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Quick Post: Current Picks

Posted by Investing Freak on May 04, 2010
General / Comments Off on Quick Post: Current Picks

There were so many new signals this weekend that I was still in the process of doing visual charts (Like this post).

Since life took over its hard to update and write a post on 18 charts so I will be short this time and just remind you that all picks (dates only) are always updated on the Current Picks page up on the top of the page.  Have a look.

Hope you all made money today.

-K

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