At the time of this writing I have taken a 56% profit after commission on some weekly SPY 127 puts that expire today. Entered in at 0.16/contract and exited at 0.28.

As you will see in the chart included, I have placed my entry and exits with yellow stars and my ideal target exit with a green star. The yellow dots in between some of the candles are times where I created an order to exit the trade and cancelled. I wanted to exit twice when I had generated 20% profit and once when I had over 25% loss.

(Click Chart to Enlarge)

My Entry (first yellow star) was just where I wanted it (below the daily pivot). I am still working on my exit execution and controlling of emotions. I usually write out how I feel about the market action or trade via either sharing with another trader via text, chat, twitter etc. When those aren’t my preferred choice I write it down on a notebook. It’s not foolproof but it helps me personally stick to my strategy and most of the time a trade.

I will provide more info about the chart for the curious ones… The purple dots represent the daily pivot point. The red dots represent resistance levels and the grey dots are support levels. The two red lines represent yesterday’s highs and lows so I would have an idea when that tight trend that developed yesterday would be broken. Also the chart is 5 minute to show the entries better but I prefer to use 15 minutes when day trading.

This is mainly on here for me to reflect on as an online public journal, they say when you publicly share something you are more committed to keeping it (in this case sticking to my strategy that works for me and just working on getting better at exits and emotions).

Update: As of 11:35AM Eastern it looks like my ideal exit has been hit and the put options were worth 0.49 a contract. Had I executed that the profits would have been 187% after commission but that’s in an ideal world. Another influencer in my premature exit (pun intended) was that Obama was set to speak around 11:35AM and I wanted to avoid any spikes that would ruin my trade.

As of 12:50PM SPY hit lower than the second support line in my chart.  Emotions got the best of me and I did exit too early indeed (would have been 400% since my entry). Its hard to think of it that way. If i had exited at -25% loss (as mentioned earlier) I would be devastated for the day.

As the new InvestingFreak tag says:  See it, Call it, Trade it, Bank it.
I Saw the potential for a down day, Called it by texting a fellow trader (will work on tweeting realtime to share ideas), Traded it, and well... Banked it.

Make some moneyyy!!

-K

Well Gentlemen and Ladies the beast is awakening from its two year sleep. In what might turn out to be a lengthy blog post I will be evaluating both Netflix and Blockbuster because in another week (December 15th) Blockbuster is expected to file its reorganization plan.

Lets start with Netflix $NFLX king which Since January 2010 alone is up a whopping 245% from $55 to $190 a share. Being a technical analysis freak I always look at the chart to see how the stock has done in the past and whether its shot up too far from the ground (my moving averages trio) and as you can see below the real ground is the 110 ema which right now stands at 151.37.  I also use two shorter term averages in case I don't want to wait for a stock to go that low but with Netflix being $40+ above ground I am willing to wait. (Click Image to Enlarge)

Sure sure technicals are one thing but I also like to look under the hood at fundamentals. I plug balance sheet, income statement and other data into my system and what I get is an all in one visual of different ratios.  The profit margins have increased over the years and that is a positive thing but Netflix's equity multiplier has increased from 1.78 to 3.41 which is basically doubled within the year and that signals to leveraging, all the profitability ratios are also good, but when we get to Liquidity ratios such as current and quick ratios we see a different story, Netflix has become more illiquid for better or worse. Lastly Long term debt to total assets has gone up significantly from 6% to 35% within a year so that might be a warning shot.  And Finally the past few day Netflix has been under the influence of mostly negative news and especially tonight's after-hours news of its CFO  "retiring".

Netflix receives a score of 57% (out of 100 of course) based on my hybrid system of technical analysis, fundamental and news and on we move into Blockbuster.

When was the last time you heard about Blockbuster? My educated guess would be around 2007 when they stopped advertising (started going belly-up). Well I do have some news for you and the news is that the Yellow and Blue logo is making a comeback but first lets keep the layout somewhat organized (neat freak) and start off with a chart.

Below is a chart using the exact averages as above but this one isn't as pretty and Blockbuster (BLOAQ) former $BBI  has been "under ground" for quite some time. Even with the recent doubling of its price from 5 cents to 10 cents the ground hog hasn't been able to stick its head above the 12 cent ground for long. Back in May the ground hog (Blockbuster) poked its head, didn't see a shadow and that resulted in 6 more months of winter. So technically speaking, 12 cents has to be broken before the stock goes anywhere gooood. (Click Below to Enlarge)

Just because Blockbuster stock is yet to break out, that doesn't mean that the company isn't making steps into a re-emergence from bankruptcy. As mentioned in the beginning of this article Blockbuster should be submitting its plan on December 15th, meanwhile they have just closed 18 more physical stores in a move from offline to online media.  For those of you that like purchasing dvds at a physical location, NCR Corp operates RedBox-like kiosks with Blockbuster logo and movies. Tests on about 900 kiosks are being run now in San Francisco, Miami etc to see if people would pay $3.99 for the first night to rent a new movie 28 days before it comes out to Netflix. Going into bankruptcy it had $1 billion in debt and coming out it is expected to have $100 million or less.

Just a few weeks ago Blockbuster received court approval for $20 million in advertising, it had not advertised since 2007 and they have already begun with a few ads showing their competitive edge of providing movies 28 days earlier than Netflix the ad campaign is called "Less Waiting. More Watching."
Another thing i noticed  while looking website statistics and info is that when you search "new releases" on Google Blockbuster.com is #3 ranked and Netflix is #10.
Ok so why would I (or You) as a consumer want to pay $11.99/month for the 1 Dvd plan when Netflix is $9.99/month right now?
Well there is a big reason why I highlighted "right now" because it is the main reason Blockbuster is the only one to offer movies 28 days earlier since it costs $3.99/movie.

With Netflix's recent fame in the stock market more companies such as the movie studios will want to suck more money out of them and they (Netflix) will pay higher prices for the movies. At this moment either Net profit margins will begin declining if the $9.99 price is still valid or Netflix will be forced to charge $10.99, 11.99 12.99 etc and that will drive users to other competitors since the price advantage is no longer valid.

With the new campaign, Blockbuster's ad spending next month is to be three times as high as it was last December. The final month of the year is traditionally one of the most lucrative for the company, as summer event movies come out on DVD and families watch movies together over the holidays.

I will leave you with Blockbuster's new ad campaign that came out less than a week ago.

What a crook I would be if I didn't disclose my holdings. Short NFLX via option puts and long Blockbuster.

First off for some humor Here's my Inspiration to the awesome title.

Ok so without even mentioning any recent news because I really don't care if the Economy officially came out of recession last summer or if Larry Summers will finally leave his post at the end of the year because I am a technical trader and I like to trade what I see rather than what I hear. If I traded what I heard then I would be a BOOOYAH Cramerica Fan which would have made me millionaire by now if I had invested billions.

Lets start off with an hourly chart for the past 20 days of the SPY so we can see what happened while the blog was inactive.
I will not reveal the indicators of lines used in the chart but with some trial and error you might be able to figure it out . As you can see starting September 1st the market broke above the blue line while at the same time volume picked up and a special indicator went from red to green.  SPY at the time was around 107 and today it reached a high of nearly 115.

Thats great and all as we see what happened in the past but what about the "Freak"ing future?  I am not calling a market top yet but I must make my intentions known that if either 115 or 113 are broken on the hourly while the volume is there then that will determine the future.  If I were to call it? I would say the volume increased the last two hours of today's trading thanks to Ben Balloonhead and the special indicator below is heading downhill (but still green).  My ideal trade would be when SPY cuts below 113 and the indicator turns red.  Remember that even if what I am preaching does not happen at least it is a more informed decision than pressing a "Buy Buy Buy, Sell Sell Sell" button. (Click Image below to Enlarge)

Next up we will visit something I like to call the Bollinger Bands and again I will not reveal the inputs but I hope you are understanding (you can always figure it out with some hard work), as you can see I have also shown the signals my system has given to me. I am awaiting for that Sell signal which might send SPY to 110's at the very least if it displays me that lovely red "S".  of course there have been times where the market just consolidates along the blue lines and then moves up in which case I wouldn't enter until I see my system print the signals while I also evaluate the chart already posted above.

Are you falling asleep yet? If so you aren't a real Investing Freak because only the elite know that without doing your homework you will go into the market like a headless chicken and come out a loser. Now Time to introduce the updated Investing Freak special chart which I last displayed back in June. If you click on the link and go to that post you will see a  "price line" drawn near 1152 (it's really just a bit over 1150 if you get microscopical), I mention that because today the market reached up to 1048.59 and retreated a full 10 points!  10 points is a sweet intra-day move which you can make a killing on if you play it right. Anyways here is the updated chart since I can see you falling asleep. (Click below to Enlarge)

Recap: I've been busy, market has been behaving according to plan and is not showing more negative signs than positive but no definite reversal has been noticed so just use the charts above for reference. If they are helpful, you are welcome to post comments so we can liven up the blog again.

Until next post.... Enjoy Making money!!

-K

It will be a week or two until I get my trading groove on but for now i've updated the Current Pick's page on top.
here are the main indices.

Market Indices

Hope its been a profitable 100 point market move for my fellow readers and here's to more fun swings to come.

-K

Did you hear that? BP cares about you so much that if you are in the Gulf of Mexico and for the next century your fishing or tourism business is doomed.. BP has put together $20 billion dollar fund for your damage It is truly truly truly sorry. Oh and If you weren't affected by BP but are part of US pension funds – including Calpers, the Teacher Retirement System of Texas and Ohio Public Employees Retirement System then BP is truly truly truly sorry for you as well because the 12% dividend yield that you saw a few days ago will be reduced to 0% so they can spread that wealth to the victims.  You can enjoy your -50% gain in BP stock now.

But wait I forgot to mention one benefit of this disaster. BP has hired cleanup workers to clean things up and this good news for the people of the Gulf.  Hey you just got promoted from fisherman to fish rescuer, Congrats!!  Just sign here on the dotted line ...........   and just make sure to not get sea sick from the delicious fumes because your complaints and health information will never be part of BP's record.

BP attempted to deny and conceal links of its oil spill to illnesses, after initial reports of oil cleanup workers who were getting sick due to extended exposure to oil and dispersants. Fishermen have complained of “severe headaches, dizziness, nausea and difficulty breathing” after working to clean up the spill, and one said BP did not provide protective equipment. But BP CEO Tony Hayward brushed off illness concerns, suggesting “food poisoning” might have been the culprit.

Although Louisiana state records indicate that at least 74 oil spill workers have complained of becoming sick after exposure to pollutants, BP’s own official recordkeeping notes just two such incidents.

You all should feel sorry for BP Because it will take anywhere from 100 days to 365 days for BP to make back the $20 billion in profit while the victims sit at home and receive checks.
Ok fine that's less than a year's worth of profits... But this is just a fund for economic damage, and won't protect it against all sorts of other legal costs. According to NYT legal costs and criminal fees could hit at least $63 billion.   WHOOPS!    Hey NYSE:BP stock... you will be missed when you hit $19 but on the bright side! You'll be a teenager again full of energy (pun intended) !

And now for a mini change of subject.  Senate has now accepted an expanded Fed audit. The House proposal allows repeated future audits of discount window and open market transactions, whereas the Senate proposal had only allowed a one-time audit. Of course this is just a grain of salt and even when it's passed it might be years before we see any audits.

BP plc (ADR) has concluded that its “top-kill” attempt to seal its broken well in the Gulf of Mexico may have failed due to a malfunctioning disk inside the well about 1,000 feet below the ocean floor. If the casing is compromised the well is that much more difficult to shut down, including the risk that the relief wells may not be enough. If the relief wells do not result in stopping the flow, the next and drastic step is to implode the well on top of itself, which carries other risks as well. The real doomsday scenario here… is if that casing gives up, and it does come through the other strings of pipe. Remember, it is concentric pipe that holds this well together. If it comes into the formation, basically, you‘ve got uncontrolled [oil] flow to the sea floor. And that is the doomsday scenario. -Naked Capitalism

The U.S. Coast Guard gave BP Plc 48 hours to find more capacity to contain its leaking oil well in the Gulf of Mexico after scientists and researchers doubled their estimates of the spill’s size.Based on government estimates, the drillship isn’t capturing as much of the spill as BP predicted earlier this month. In a June 4 interview with CBS, Suttles said the system would be capable of capturing as much as 90 percent of the flow.

If BP does not comply with this order, and cannot give a satisfactory reason why, this will put them further on the back foot in their meeting with Obama next week. Readers are correctly cynical as to whether the Administration will live up to its tough words, but the groundwork is being laid, which would make failure to follow through even harder to defend.

Separately, BP said its board will meet June 14 to discuss whether to cut or defer its second-quarter dividend payment following the spill. This is causing BP's Major British Shareholders to Ditch The Company While American Ones Are Staying. Major UK institutions including Legal & General, M&G, Scottish Widows, Threadneedle and Axa have all trimmed their holdings since the Deepwater Horizon rig sank. US pension funds – including Calpers, the Teacher Retirement System of Texas and Ohio Public Employees Retirement System – have held their stakes in the company despite the dramatic fall in the share price.

If you think BP is a good buy right now check out this article: The Ultimate Contrarian Bet: BP

Lets see what today has in store for BP and the rest of the market.

Happy Trading

Update 1pm : - Senate Majority Leader Harry Reid (D, Nev.) and members of the Democratic caucus on Monday asked BP Plc (BP) to set aside $20 billion in a special account to be used to pay for economic damages and clean-up costs of an ongoing oil spill in the Gulf Coast.

Update 3:30pm: To demonstrate that it’s responsibly taking care of the oil spill and listening to public complaints, BP has touted the fact that it has set up call centers to handle the response. However, one of the operators at the BP Call Center in West Houston has revealed that she and the other 100 employees are just PR props; BP isn’t actually doing anything with the thousands of calls it receives: "“We’re a diversion to stop them from really getting to the corporate office, to the big people,” said Janice. … Because the operators believe the calls never get past them, some don’t even bother taking notes."

Here is an Update of the InvestingFreak Special SPX chart the Red Line (250MA is broken for now so lets see if it holds broken and turns into resistance. to the downside i see 1040 and to the upside a retest of 1104 at least is possible although not all this action might come monday. (Click Image to Enlarge)

So there you have it. Fun week ahead but lets all make money whichever way it goes.
Also visitors are always welcomed and encourage to comment and participate in daily market discussions, your posts wont be deleted or censored unless they contain inappropriate content and links.

S&P futures are down 9 points since the open.  On top of the page in the "Economic Calendar" tab you have easy access to the daily calendar happenings and live commodity futures.

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 “exceptional volatility” 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.   “Massive” short-selling was leading to excessive price movements which “could endanger the stability of the entire financial system,” 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.

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

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)

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

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

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