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Stock-Age: Stocks, Options and Dividends oh my!
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Ether_Snake
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FSLR up 10% after announcing:
Chinese solar plant expected to be the biggest
Solars are up as a result.
Chinese solar plant expected to be the biggest
Solars are up as a result.
Ether_Snake
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Zyzyxxz said:
I got some STP shares. There is FSLR. TSL. LDK. CSIQ (don't let the name fool you, it is Chinese too). ESLR. As you can tell, practically all big solar companies are Chinese.
Be careful, solars are EXTREMELY volatile. It's nice to have some money in the sector, but if you are betting for a jackpot good luck, it's like the dot-com boom, it's full of startups, lots of competition, etc., lots of hype and disinformation.
China is currently crushing everyone else though, in part due to cheap labor, but also because spending more money in getting solar panels and the likes in place gives more experience and funds to their companies. Wouldn't be surprised to see forms of protectionism affect the green energy sector in the future. Green energy is going to be key to create jobs, yet everything can be made in China, so you end up only with installation and maintenance jobs.
We'll see, but remember the sector is risky.
Alright, here's a guide on how to use moving averages.
1) Should I use the 50 day or 200 day?
This really depends on you. I know traders that refuse to buy any stock that is trading below its 200 day moving average. Other traders love to play with the 50 day moving average. Trading around the 200 day moving average will lead to less trading and fewer whipsaws. But the 200 day doesn't capture the big moves that can happen when stocks break through the 50 day (as we saw the first half of the year). If you have the time, play around with the 50 day and set steps below it. If you have less time, you may want to use the 200 day.
The #1 rule: PUT IN YOUR STOP LOSSES! ONLY ACCEPT A 1-3% LOSS! You can always buy the stock again! Don't be the investor that wakes up one day trying to figure out why their portfolio is down 50%. Better to take a 1-3% loss than let a stock decline by 20% before bailing. Take lots of small losses and let your winners run.
2) Using moving averages to avoid stocks that are about to fall and profit from declines.
Example: UNG.
I wish I had a dime for everytime someone told me UNG (natural gas) looks cheap. Our resident Fallout fanboy, kathode, is familiar with the pain of owning this thing.
However, if one used simple moving averages, they could have avoided 99% of the pain - and profited from the decline since mid 2008.
At 1) UNG broke its 50 day moving average. This was the sign to sell or at least avoid adding to your position.
At 2) UNG breaks its 200 day moving average. This is big warning sign. Here we're really looking to go short or at least monitor the situation for a retest of the 50 day.
3) UNG continues to fall and makes several failed attempts at its 50 day moving average. Every failure is an opportunity for you to go short. If you didn't catch the turning points at 1) and 2), no biggie. This is the meat of the trend and is where most of the money is made. You're short all the way down until 4).
At 4) UNG breaks out of its downtrend and you cover your short. You may use this opportunity to buy. If you bought at 4), you're stopped out once UNG crosses back through its 50 day moving average. No biggie - you lose 2-3% at most on this trade. That's fine when you've just captured over 60% from UNGs fall.
You may go long again once it pops above its 50 day and get stopped out for another 2-3% loss. No big deal. This is called being whipsawed and is part of the deal. Expect around 50% of all your trades to result in 1-3% losses from these false signals. The other 50% of your trades are going to capture the huge moves. Great traders embrace their losses and cut them quickly. It's just part of the business. At 5) UNG failed at its 50 day yet again and this could be a short opportunity but given the recent successful attempts to break its 50 day you may want to sit on the sidelines. Today it looks like UNG is popping off its bottom and is looking to move to its 50 day once again. If it fails, short. If it succeeds, go long. Let the market tell you what to do.
Example: SP500.
While the rest of the world was screaming and recoiling in horror, the trend trader actually went short the market early 2008.
At 1) the market already showed weakness. The 50 day crosses down through the 200 day. The SP500 couldn't break through. That's right: before Lehman, before the bailouts, before the panic, the market already was telling you to bail out.
At 2) we have another failed attempt of the 200 day moving average. You can use the opportunity to short or just avoid new investments altogether. Shortly after the failed attempt at the 200 day, the market crashes through its 50 day.
At 3) the SP500 surfaces above the 50 day briefly. You may go long here. You'll get stopped out for another 1-3% loss. You go short when the market fails again and shows weakness.
4) is another area where you'll probably get whipsawed. No big deal. You just captured a huge short opportunity when the market went into its tailspin. You lose another 1-3% at this juncture.
5) Oooh what's this? A huge move to its 50 day. Wait a minute... we saw this at 4) didn't we. Well guess what, this time we didn't get stopped out when we put money to work as it broke through the 50 day. We're about to capture a huge move that more than erases the 1-3% loss that we took at 4).
6) is an important area. The SP500 just broke through its 200 day - the first time in over a year! It's kind of irrelevant because the 200 day is still downward sloping. But... wait... what's this? Bam! In July the SP500 bounced of its 200 day and skyrocketed through its 50 day. 100 points later and here we are.
3) Riding stocks in uptrends.
Example: AAPL.
Ah, everyone's favourite stock. Yes, it's ridiculously expensive. Yes, Steve Jobs could drop dead any day now. Blah blah blah. These things are irrelevant when you distill everything down to moving averages.
Between October and March AAPL was in a tight range. Everytime the stock hit 80 it rebounded only to pull back from the 100 area. You can see the 50 day moving average was moving sideways and would have given you several signals that would lead to whipsaws. That's fine. Let's say you bought AAPL the five times it broke through its 50 day during this period. You would lose 1-3% as you get stopped out. Then you do the same thing in March... and here's where the action happens. You capture a move that's almost 100%!! In June the stock corrects to its 50 day. Stay long. In July it corrects to its 50 day. Textbook stuff. Stay long!
So that's it. Begin your day by scanning through the SP100 stocks. Which stocks are trading above their 200 day? 50 day? Which stocks are breaking down (e.g. Solar stocks a couple weeks ago). Buy stocks in uptrends that are responding to their moving averages. Avoid stocks that are going sideways and whipsawing through their moving averages. Short stocks like UNG that are in downtends.
Even if you don't believe in this stuff and think its mumbo jumbo and want to stick to the fundamentals, it still pays to pay attention. Spend 5 minutes a day looking at the broader indices and commodities. Is the market strong (above its 200 day)? Is it weak (below and failing at its moving averages)? You would have avoided the pain of the last year by simply following the rule to avoid any long investments when the SP500 is trading below its 200 day moving average.
1) Should I use the 50 day or 200 day?
This really depends on you. I know traders that refuse to buy any stock that is trading below its 200 day moving average. Other traders love to play with the 50 day moving average. Trading around the 200 day moving average will lead to less trading and fewer whipsaws. But the 200 day doesn't capture the big moves that can happen when stocks break through the 50 day (as we saw the first half of the year). If you have the time, play around with the 50 day and set steps below it. If you have less time, you may want to use the 200 day.
The #1 rule: PUT IN YOUR STOP LOSSES! ONLY ACCEPT A 1-3% LOSS! You can always buy the stock again! Don't be the investor that wakes up one day trying to figure out why their portfolio is down 50%. Better to take a 1-3% loss than let a stock decline by 20% before bailing. Take lots of small losses and let your winners run.
2) Using moving averages to avoid stocks that are about to fall and profit from declines.
Example: UNG.
I wish I had a dime for everytime someone told me UNG (natural gas) looks cheap. Our resident Fallout fanboy, kathode, is familiar with the pain of owning this thing.
However, if one used simple moving averages, they could have avoided 99% of the pain - and profited from the decline since mid 2008.
At 1) UNG broke its 50 day moving average. This was the sign to sell or at least avoid adding to your position.
At 2) UNG breaks its 200 day moving average. This is big warning sign. Here we're really looking to go short or at least monitor the situation for a retest of the 50 day.
3) UNG continues to fall and makes several failed attempts at its 50 day moving average. Every failure is an opportunity for you to go short. If you didn't catch the turning points at 1) and 2), no biggie. This is the meat of the trend and is where most of the money is made. You're short all the way down until 4).
At 4) UNG breaks out of its downtrend and you cover your short. You may use this opportunity to buy. If you bought at 4), you're stopped out once UNG crosses back through its 50 day moving average. No biggie - you lose 2-3% at most on this trade. That's fine when you've just captured over 60% from UNGs fall.
You may go long again once it pops above its 50 day and get stopped out for another 2-3% loss. No big deal. This is called being whipsawed and is part of the deal. Expect around 50% of all your trades to result in 1-3% losses from these false signals. The other 50% of your trades are going to capture the huge moves. Great traders embrace their losses and cut them quickly. It's just part of the business. At 5) UNG failed at its 50 day yet again and this could be a short opportunity but given the recent successful attempts to break its 50 day you may want to sit on the sidelines. Today it looks like UNG is popping off its bottom and is looking to move to its 50 day once again. If it fails, short. If it succeeds, go long. Let the market tell you what to do.
Example: SP500.
While the rest of the world was screaming and recoiling in horror, the trend trader actually went short the market early 2008.
At 1) the market already showed weakness. The 50 day crosses down through the 200 day. The SP500 couldn't break through. That's right: before Lehman, before the bailouts, before the panic, the market already was telling you to bail out.
At 2) we have another failed attempt of the 200 day moving average. You can use the opportunity to short or just avoid new investments altogether. Shortly after the failed attempt at the 200 day, the market crashes through its 50 day.
At 3) the SP500 surfaces above the 50 day briefly. You may go long here. You'll get stopped out for another 1-3% loss. You go short when the market fails again and shows weakness.
4) is another area where you'll probably get whipsawed. No big deal. You just captured a huge short opportunity when the market went into its tailspin. You lose another 1-3% at this juncture.
5) Oooh what's this? A huge move to its 50 day. Wait a minute... we saw this at 4) didn't we. Well guess what, this time we didn't get stopped out when we put money to work as it broke through the 50 day. We're about to capture a huge move that more than erases the 1-3% loss that we took at 4).
6) is an important area. The SP500 just broke through its 200 day - the first time in over a year! It's kind of irrelevant because the 200 day is still downward sloping. But... wait... what's this? Bam! In July the SP500 bounced of its 200 day and skyrocketed through its 50 day. 100 points later and here we are.
3) Riding stocks in uptrends.
Example: AAPL.
Ah, everyone's favourite stock. Yes, it's ridiculously expensive. Yes, Steve Jobs could drop dead any day now. Blah blah blah. These things are irrelevant when you distill everything down to moving averages.
Between October and March AAPL was in a tight range. Everytime the stock hit 80 it rebounded only to pull back from the 100 area. You can see the 50 day moving average was moving sideways and would have given you several signals that would lead to whipsaws. That's fine. Let's say you bought AAPL the five times it broke through its 50 day during this period. You would lose 1-3% as you get stopped out. Then you do the same thing in March... and here's where the action happens. You capture a move that's almost 100%!! In June the stock corrects to its 50 day. Stay long. In July it corrects to its 50 day. Textbook stuff. Stay long!
So that's it. Begin your day by scanning through the SP100 stocks. Which stocks are trading above their 200 day? 50 day? Which stocks are breaking down (e.g. Solar stocks a couple weeks ago). Buy stocks in uptrends that are responding to their moving averages. Avoid stocks that are going sideways and whipsawing through their moving averages. Short stocks like UNG that are in downtends.
Even if you don't believe in this stuff and think its mumbo jumbo and want to stick to the fundamentals, it still pays to pay attention. Spend 5 minutes a day looking at the broader indices and commodities. Is the market strong (above its 200 day)? Is it weak (below and failing at its moving averages)? You would have avoided the pain of the last year by simply following the rule to avoid any long investments when the SP500 is trading below its 200 day moving average.
Ether_Snake
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TTWO up 7.66% in AH. For whatever reason.
Edit: nm, another fluke.
Edit: nm, another fluke.
Ether_Snake
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Zerohedge.com have been saying that algo-trades are programmed to start buying massively at 3:25 and sell at 3:55.
Ether_Snake
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Dow Jones on September 11 2001 and September 11 2009:
9,605.51 VS 9,605.41
9,605.51 VS 9,605.41
Ether_Snake
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That idea is that you can never managed to make a buy call at the lowest, nor a sell at the highest, hence making a sell at the lowest or a buy at the highest is also unlikely.
So if it is in a falling trend, you short, since there is likely some more falling to go, even if it's just a bit. If it is in a rising trend to buy, because there is probably some rising left, even if just a little.
I never tried that myself though, commissions are too expensive.
So if it is in a falling trend, you short, since there is likely some more falling to go, even if it's just a bit. If it is in a rising trend to buy, because there is probably some rising left, even if just a little.
I never tried that myself though, commissions are too expensive.
I don't think there will be a Sept. meltdown. Looking at news reports for the last two months (see below) things are looking better (with the exception of unemployment & the dollar falling). Earnings season kicks off the first week of October and we all know that financials will lead the market. Remember, GS started the current rally with their "blowout quarter". The markets were headed lower until that report came out. I see GS having good numbers again this quarter. I'm looking for them to head back near the $200 range again.alejob said:
Ether_Snake
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I don't see hiring making up for the huge number of job losses. Then you have all the graduates that will still be looking for jobs, etc. The impact of this has yet to show up.
Basically, people will have much less to spend, so even if the fall stops, I don't see growth and especially no way to go back to previous consumption levels. And the impact on China has yet to be seen, they are using smoke and mirrors for now to hide the impact.
And when the stimulus runs out and nothing has changed, we'll go back down.
Basically, people will have much less to spend, so even if the fall stops, I don't see growth and especially no way to go back to previous consumption levels. And the impact on China has yet to be seen, they are using smoke and mirrors for now to hide the impact.
And when the stimulus runs out and nothing has changed, we'll go back down.
Ether_Snake
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No idea at all what will happen. But the situation is the same world-wide, so I'm thinking it's going to be ugly. I don't think there is much room for another game of illusions, there's a limit to how long they can keep the stimulus going.
Ether_Snake
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Anyone has a long-term chart of the US' dollar value, up to date?
It is going down pretty low.
It is going down pretty low.
Perhaps a sign for tomorrow...Asian market is tanking today http://www.bloomberg.com/index_asia.html
yoopoo said:Perhaps a sign for tomorrow...Asian market is tanking today http://www.bloomberg.com/index_asia.html
*Gets shorts ready* Come on, bring it on FUUUUCKKKEEERRRS!!
=P
Ether_Snake
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USD to go below 90 this week VS the Yen I bet ya.
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
Ether_Snake said:
Why do you view the stimulus as smoke and mirrors?
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
kathode said:
Yep green again. This market is tough as nails.
Ether_Snake
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mckmas8808 said:
For China it is, they have no chance in hell to turn their economy into one less centered on exports in a relatively short time. This means that they need to keep their stimulus going, and potentially create bubbles along the way as they try to keep their economy up.
And for the US the stimulus is worthless without fundamental changes being done in parallel, which aren't taking place. If the US wants to give themselves more time, that means expanding the stimulus, which eventually becomes impossible.
So I look at it as one way or another we have no choice but to see a major drop when the stimulus either in China or the US or both can't be supported further. When it happens, it will be too soon, neither China nor the US will have had managed to transform their economy to stay up without the stimulus. What happens after that who knows, could go any way. Last time around when the stimulus came to an end and the markets started tanking again, for those very same reason, the second world war occurred which sent markets up. I can't imagine a big war in our time, so I see nothing like that, unless China completely collapses and becomes highly unstable during the following years, effectively eliminating the main problem that the world economy has today which is trade imbalance/trade deficit.
(On the last unrelated point, imagine if the US disappeared from the face of the Earth before WWII, Europe would have recovered economically (assuming no war took place), since excessive production capacity would no longer exist in the world economy, and hence jobs would be created to meet demand, which was excessively met until then by the US at the cost of other nations. Turns out Europe got devastated, and this allowed excessive production capacity to become normal capacity; demand was no longer surpassing production capacity, since everything needed to be rebuilt. So again today, same thing. We have excessive production capacity in China which has a negative impact on jobs/salaries/etc. But for excessive capacity to become normal, you need either reduced capacity, or increased demand. I see no way to increase demand, especially considering that if the US was destroyed the only way for US demand to rise would be to cancel their debt, and for capacity to fall China would have to be the one that would be devastated. So in both cases, it is impossible without nuclear war, so very unlikely, so it means a long period of slow adjustments, which means no rapid growth in sight for a long time except for short-lived bubbles, each successively short than the previous one until we reach the bottom
)Edit: Here is a good new article on China: Can China Keep It Up?
Oh how familiar!
Ether_Snake
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mckmas8808
Mckmaster uses MasterCard to buy Slave drives
kathode said:
Yep. And I think it will hit 10k in Q4 2009.
I'm still not sure what to do about my C buy-write. I got a letter this morning:
http://www.citigroup.com/citi/fin/data/ceoletter090910.pdf
http://www.citigroup.com/citi/fin/data/ceoletter090910.pdf
Ether_Snake
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Interesting:
Emerging markets fell the most, jumped back up the most.
From this GS document: http://www.zerohedge.com/article/gs...in-market-highs-tangible-goal-quant-investors
But where is the rise in demand? I mean emerging economies were driven by export, but if exports fell and is not coming back why are they rallying over every one else? Makes no sense to me.
Also from the document: "Opportunity: Quality businesses have not rallied"
Ok, so how is that a good sign? Crap fell hard and jumped hard is what they are saying. They say to invest in emerging markets, but I always expected emerging markets to be hit the hardest. EM are reactionary. Until an EM country actually frees itself from its export-oriented economy it is still on a red line.
They say these documents are not for the general public, but that's bull, they don't care. Remember their calls for $200 a barrel for oil before it went in the $30s?
Emerging markets fell the most, jumped back up the most.
From this GS document: http://www.zerohedge.com/article/gs...in-market-highs-tangible-goal-quant-investors
But where is the rise in demand? I mean emerging economies were driven by export, but if exports fell and is not coming back why are they rallying over every one else? Makes no sense to me.
Also from the document: "Opportunity: Quality businesses have not rallied"
Ok, so how is that a good sign? Crap fell hard and jumped hard is what they are saying. They say to invest in emerging markets, but I always expected emerging markets to be hit the hardest. EM are reactionary. Until an EM country actually frees itself from its export-oriented economy it is still on a red line.
They say these documents are not for the general public, but that's bull, they don't care. Remember their calls for $200 a barrel for oil before it went in the $30s?
Ether_Snake
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US Residents Dispose Of $29 Billion In Foreign Securities In July
So much for yesterday's GS report on emerging markets!
So much for yesterday's GS report on emerging markets!
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
I wonder if the S&P 500 will close over 1,070 points today. I read that it was an important number to keep in mind.