TED Target reached: Increasing short positions.
Here we go again.
On September 28 I stated the following:
The TED Spread which measures the general risk in the economy has been rising the last couple of weeks. today alone it rose 5.42% which means interbank loans are now riskier. This is still not significant enough and I would like to see another 33% increase in the TED before I really put a lot of my sidelined money on the short side.
On the 28th TED was at around 0.195 so a 33% move would put the TED at around 0.26 and today TED closed at 0.262 which satisfies my reasoning for going short.
On October 27th TED was in an Ascending Channel and also stated that a higher TED spread would mean that a major market correction is underway as banks are raising loan rates between eachother. Rising rates means there will be some major trouble in at least the financial sector which allocates 15% of the S&P Index.
Here is the latest Chart of the TED showing the channel that has been broken. (Click To Enlarge)
Another Blogger has picked up on the TED and here is Daneric's TED Chart.
Finally keep in mind that the current TED is still far below the average TED which is at around 0.50 (50 basis points). We're halfway there and its good to catch onto this risk indicator before CNBC does.
I will add shorts via options and inverse ETF's very soon but always use my opinions as a viewpoint and not investment advice. Everyone has different risk tolerances.
Happy Trading, K
Is the end (of this prolonged rally) Finally Here?
Whether you have been a bull or a bear since March you have to be worried about what will happen from here.
Bulls might lose if market goes down and corrects itself, Bears might keep losing money being short (unless they hedge then they are neutral players).
Here is a chart of the S&P futures that I found interesting how it topped around 3:31Pm at exactly the first Pivot Resistance (R1) or 1007.75. It's been downhill from there so far.
Have we finally reached the turning Point? (Click to Enlarge)
As I write this the ticker is heading towards 997.75 which is the first support for Friday.
UPDATE: WE HAVE HIT the first support line of 997.75 and might bounce or crash through.
Update #2: here I am 8 hours later and the futures have made a 360 degree turn. They now hit R1 (red line) of 1011.25.
What do you think? I am also long the Volatility Index (VIX) Via September 40 calls (got long today) because I think we are entering volatile markets again and that would be great.
-K
Sell Tech?
If you check the Current Picks Tab you will see I have updated it again.
After running my strategy... $COMPX , $QQQQ, $IWM, $IYR, $QLD, $URE are all on the SELL list.
I am wondering if the tech sector (COMPX, QQQQ, QLD) is the first one to lead the next correction or if it is just lagging the seemingly never-ending rally of the current market.
Stay tuned and keep checking my twitter for more info. (either on the right column under "Latest Updates" or at http://www.twitter.com/investingfreak )
-K
Summary of picks from yesterday
Yesterday’s picks turned out to be right on. Although with pathetic moves, AMD gained its way up. It has been trying to break its new resistance at $4.50 majority of the day. Unfortunately, I followed my plan and sold it in the morning to break even (including commission) because I did not have any more patience from watching it a day before. If I would have kept it for the day and trust my own gut, I could have made easy $0.2501 per share (or 6%). I hope some of you had more patience and easily profited on AMD. The lesson to be learned from this is that I’m very impatient trader.
AIB is hanging strong. Even though I intended to keep it for a longer period of time, I sold it with $0.26 per share profit (or 9%) because I needed net liquidity for other trades I did today. With that said, AIB is still a keeper and I will very likely get back into this stock some time this or next week.
| Company | Buy Date | Sell Date | Buy Price | Sell Price | Gain/Loss |
|---|---|---|---|---|---|
| AMD | 5/18/09 | 5/19/09 | $4.1399 | $4.15 | - |
| AIB | 5/18/09 | 5/19/09 | $2.89 | $3.15 | 9% |
Although single digit, 9% profit overnight is always nice.
Let me know what you think about those two picks in the comment box.
Stock Alerts of the Week May 4 – May 8 2009
Last week's picks have so far turned out to be good. DRYS is up almost 30% since signal.
Let's move to the score card. 5 positive gains of over 10% each. BAC signal got changed to a buy from a sell just 2 cents difference, and $BKX is acting up in my charting software so I will just eliminate it from watchlist.
Picks of the week of May 4th to May 8th 2009
|
Symbol |
Buy Date |
Buy Price |
Sell Date |
Sell Price |
|
QQQQ |
|
|
5-7-2009 |
34.29 |
|
BAC |
5-4-2009 |
8.82 |
|
|
|
REW |
5-7-2009 |
48.31 |
|
|
|
MOV |
|
|
5-5-2009 |
8.98 |
|
DRYS |
|
|
5-8-2009 |
8.36 |
|
URE |
5-8-2009 |
3.70 |
|
|
|
CFX |
|
|
5-7-2009 |
8.50 |
I hope you are enjoying the picks so far. And just let me know about any suggestions on the comment box
-K
Stock Alerts of the Week April 27 – May 1 2009
As I stated in my latest blog post I wanted to begin giving stock picks based on my trading system.
I have created a page above with all the picks and wouldn't mind people asking for symbols to put on watch list.
I will also try to post a week in review with the signals given out for the week.
Here are the picks for April 27 to May 1st 2009
|
Symbol |
Buy Date |
Buy Price |
Sell Date |
Sell Price |
|
$BKX |
4-27-2009 |
34.54 |
||
|
BAC |
5-1-2009 |
8.84 |
||
|
DRYS |
4-30-2009 |
6.72 |
||
|
ICE |
4-29-2009 |
84.14 |
||
|
ING |
4-29-2009 |
8.34 |
||
|
UNG |
5-1-2009 |
13.72 |
||
|
ICO |
4-29-2009 |
1.90 |
As always these are picks but I am not responsible for any financial losses you make following these picks. I wouldn't mind a share of your gains though.
-K
Stock tips from the Freak strategy
After SKF's latest blunder in which I called the sell-off then couldn't resist the LOW LOW price of $155, I set off to design a strategy that overtime would bring consistent growth. I am using a 4hour interval for the strategy so it really isn't day-trading but also it's not long term investment (like those exist much anymore).
The idea is to give stock tips when the strategy throws me a Buy signal then to call the selling point when the strategy yells SELL.
Now If i use the S&P 500 or the Russel or any other index (all the stocks within it), I will get a lot of buy and sell signals that will drive me crazy.
I'm wondering if any of you have ideas on which stocks to put on watch list. I will also need to create a section on this page to show the buy and sell signals with their dates as well as how much gain/loss occurred.
I think i might be going a bit over my head as many people do this for a fee (Timothy Sykes anyone?) but I will think this through for the next week or two and then decide what to do. Your comments are really needed this time especially for ideas on which stocks to put on the alert list.
Till next Time,
-K (The busy man)
SKF (UltraShort Financials) Overbought?
I hope you saw my post about my February performance. Most of my gains were thanks to shorting the financial sector via SKF.
I have still kept an eye on the ETF after selling it and is now is extremely overbought on many levels. I had a target of $250-255 for it but I did not hold my shares past $200. Now that my target has been reached I am looking for SKF to come back down to earth, I am looking for at least $182-186 range.
With the market crashing down so fast there is not much incentive to go more short as I am sure SEC has plans for a no shorting rule or at least something to stop the bleeding. That concludes this post and I will rest my case by providing you the chart which I am basing my case on.
Below I am attaching a chart showing the RSI being overbought but also SKF itself going over the Bollinger bands that I use.
If you are looking to buy into SKF (besides trading it for quick scalps) then either stay away from it or just take the chart into consideration. (Click to Enlarge)
As always, I merely post my opinions on here so I am not responsible for anyone's financial decisions.
Have a good day,
-K
Best Monthly Performance for me
February 2009 became the best month in my short trading career.
You can look at my covestor account which assumes that I invest 100% of my portfolio and see that i have made over 23% returns.
In reality, this month I had a gain of 13.54% while S&P was down 10.99%.
I basically beat the S&P by 24.53% (I don't believe in benchmarks but this is for those readers who do).
The chart I will post below will reveal my true account size which to some of you will seem like spare change. (Click to Enlarge)
Here's to hoping for a good March Performance. (Be it in a bull or bear market)
-K
Dug is up 20% in over a week
Many of you might have read my previous article where I question whether the oil bubble was ready to burst.
Previously: Is The Oil Bubble Ready To Burst?
Since July 7, 2008 until July 16, 2008, (DUG) has gained well over 20%. This is certainly not a burst of bubble but it is interesting to see whether it'll sustain for a longer term.
If you invested on (DUG) or have any comments please feel free to comment.
