Dow slips another 237 points

The DOW closed today at 12743.44. Since April 4, 2008, it has only dipped this low on one day in August, the 16th to be exact.

While I am not one to panic, holding firm in the face of adversity sure isn't working for me. I have a fist full of calls that I purchased in November, that are losing time value as we speak as I keep waiting for the graceful out that never comes. As my portfolio diminishes in size, I have to seriously consider taking some losses, and not having any regrets when the market bounces back. I've limited my day trading to one trade a day, and have found myself on the wrong side of every trade I have made since last Wednesday. I have several stocks that I watch, I try to determine which direction they are moving, and jump on and off before they reverse. Unfortunately I have picked the wrong stock each day to trade, which is only exacerbating the losses that I am feeling from the calls I am holding, and adding to my feelings of frustration.

Today was RIMM calls. I had a several opportunities to get out with a small gain or loss, before the end of day plummet. Despite my original plan to sell at whatever I could get at the end of the day, I have seen the market rebound from these big losses each of the past three Tuesdays, so I am holding this one overnight, and going to look for a reasonable out before the 10:30 dip.

Wish me luck my friends, I'm going to need a fistful of it if I am going to survive the December option month. The bear is coming at me, whether I want to believe it or not.

Note: Learned today from Navelliers blog that Mutual Fund tax year ends on October 31, so fund managers have already done their year end tax sales. This is a perfect time for them to be scooping up the blue chip bargains.

Always perform your own due diligence before making any investment.

DOW closes below 13K for the first time since August

The market continues it's downward spiral, and my account continues to follow suit. I've lost all hope of recovering to even by the end of the month, and at this point will be happy to not bust out. I ended today back at the level I was last Monday. The best that I can hope for at this point, is a modest rebound similar to what occurred last Tuesday.

My big surprise for today was HTE's break down to under $23.00. I really thought it had hit bottom. My 401K cash out still has not occurred, which is a mixed blessing at this point. Since the market is down, so is my account, so cashing out now will give me less cash to fund my Rollover IRA with, however with the market hitting new lows, there are also some excellent buying opportunities, such as HTE.

PCU tested 101 a couple of times today, to finish just above at 102. It did reach the lowest levels it has seen since mid August, however, so it's hard to tell if the ride down is finished. IF it breaks through 101, the next support level is 95.

High volatility on low trading is blamed somewhat on Thanksgiving. Each day shows me how much I still have to learn. I really felt that this would be an up week coming off of options expiration. In fact, I purchased a bucket full of what I thought were cheap calls last week, to find find them crushed today. Lesson learned again there.

All I can say is that if I can survive this next few weeks, this costly education may pay off. I just hope I have a "chip and a chair" when this volatile DOW finally settles down.

Always perform your own due diligence before making any investment.

Is there a place for empathy in the stock market?

So, I am checking on the after hours news regarding my stocks and options. Copper is up due to an earthquake in Chile. My initial reaction? Great! Those PCU options that expire on Saturday may be worth something after all! Since I own the stock and some December calls as well, this is a big score from me, in a month where my portfolio has taken a beating, great news!

And then I read further.

"A powerful earthquake hit mineral-rich northern Chile on Wednesday, killing at least two people, injuring more than 100 and halting output at some of the world's largest copper mines."

and

Authorities said an 88-year-old woman was killed when a wall fell on top of her in Tocopilla. A 54-year-old woman also died in the small city, although the cause of death was not immediately clear.
Alway

Buildings crumble, people are trapped in the rubble, people injured, people dead, there homes and belongings in a shambles. From their misery, their pain, their bad fortune, I will make money.

I love everything about my new job as a day trader, everything but this.

Always perform your own due diligence before making any investment.

Update on HTE

HTE may have bottomed out at 23.00. I almost doubled my HTE holding today at $23.50. I am averaged in at 23.22. The stock closed today at 23.48. At this price point it pays a 20.18% dividend. It doesn't get much simpler than this if you are looking for an income producing investment.

And frankly, while it sometimes takes a while for HTE to bounce back, it always does, because people can't resist that dividend, and it is guaranteed until February. If you dig a little deeper, and learn what a trust is about, and review their past dividend dispersement, if you are like me, you will see this as a guaranteed top end income producer, every month, until 2011, at the soonest! If you don't grab this one someone else will, and the price will go up. The funny part is even if it goes to $30.00 a share, it is still paying a 10% dividend! Where else are you going to get that?

In fact, I am so confident that this stock is going to move upward in price, that I purchased the February 30 calls for .25 apiece today to compliment the extra shares I bought. Check out their website.

Always perform your own due diligence before making any investment.

It's only a loss if you sell it

Strong stocks will come back, and POT did just that. Pot made a maneuver similar to this one last August when the market turned downward. I have every confidence that this one will revisit that $125 range.

Like I said yesterday, there was no conceivable reason other than panic and profit taking that people sold this stock Monday. Anyway, by close of day on Monday my contracts were worth about .40 apiece. I have made a deadline to sell these options by close of the market on Thursday. In order to maximize the amount of the investment that I can recoup, I decided to sell the calls in 6 lots. Two lots each day Tuesday, Wednesday, and Thursday. At any time that I can get between $6.00 and $7.05 a contract before end of trading Thursday, I will close out my position. I will use market daily trends to chose the proper time to sell. The first lot of the day will sell the third time I get a bounce off an option resistance level. That happened around $2.50 today, and I got my sell in for $2.30. As the end of the day approached, I had a bounce off $2.60, and sold it when it hit the second time. The last trade of the day was $2.00.

While these sales still netted me a loss from my average in on these calls, I was still pleased with the amount of money I recouped from my closing price on Monday. You have no idea how glad I was that I didn't panic. So, 1/3 of my POT 115 calls have been liquidated, and I have 2/3 more to try and optimize over the next couple of days.

My new rule is that all options for the current month are cashed on the Friday prior to option expiry week. If I want to play options week, I'll play with the following months options. It's less nerve wracking!

I gained back about 30% of yesterdays loss today. My portfolio is still down 28.8% for the month. It will be a challenge to get back into the black before the end of November, and plan and prepare a holiday meal for my in laws on Thanksgiving! Wish me luck!

Good Fortune.

Always perform your own due diligence before making any investment.

My first month of option trading is almost over.

Option trading is definitely not for the faint of heart, or the fumbled of fingers. That slip on POT last week has all but crippled me today. While the DOW only dropped 55 points, POT fell 16 points on no news. In fact they just released their third quarter results last week, and they were sterling.

Every where I look though, high dollar stocks are taking big losses. Of course like I said, it's only a loss if you sell it...Except with options.

My intent was to go into the last week of options without holding any, as I knew this would be a volatile week, and I am so new to this. But with my POT options down fourteen percent, I figured I would wait until Monday. It might be an up day after all, with the market selling off so sharply Friday afternoon.

So I got up nice and early, made my coffee, read my message boards, some news articles, and e-mailed a bit with my dad. 9:30 am eastern came, and my eyes were peeled, watching my POT and PCU level II's. I watched the Dow head up, and POT plummet, for what reason I still don't know, testing 110. You can't even sell options until 9:45 eastern. Those 15 minutes were some of the most helpless I have ever felt. There I sat, watching the investment I had inadvertently doubled up on, plummet before I could do anything about it.

Had I known then what I know now, I would have taken first hit and sold when I came on, because as the day progressed, while the DOW slowly rose, POT kept getting battered. When it tested 110 the second time, I decided to buy the puts, as there was no support for another 10 points. I found an out where I made a 74 ROI on that investment. Some sold after mine for .20 higher, but then the stock headed back up, and the options back down. I was ready for at least a bit of a rally. Nothing. As the day neared end, I was able to pick up some 100 puts on the cheap. By the end of the day the stock was down over 16 points. I have been checking in all night, looking for any sign of why POT got hit so hard. I looked at my portfolio, and realized my blue chips were getting battered. NOV, PCU, MDR, and some I didn't own anymore, FWLT, DRYS, RIMM. Heck, even GOOG was down 35 points!

So, what will tomorrow bring? Well, I see no reason for POT to have dropped 16 points, but there is also nothing holding it up at the 100 level. POT may see 90 before the week is over. If it does, I'm ready for it. However, a part of me can't help but see the game. You scare people out of their trades on Monday, dropping the price 16 in one day, and then you have 4 days to make that 16 back. Well, it could happen. At this point, the worse thing that could happen to me, is that POT languishes in this 100-105 area for the next 4 days. That being said, the worse case scenario is that I loose the money I invested on that downside, which would bring my losses to 27% instead of 25. Worth the risk when you are looking at no support for another 12 points. While you can't really judge how a day is going to go based on after hours, there were a lot of sales of POT in the 100-101 dollar range, so the mild resistance at 101 has already been test, technically.

Or I could lose it all by Friday. I'll keep you posted. I am playing the downside as well, on this one, to try and minimize my losses. My portfolio took a dramatic hit today. With last weeks losses my portfolio is at the lowest level I have seen since opening this account in February. I am down 37.5% so far in the month of March. So much for making that 10% gain this month! The good news is, that some of that is in stock I still own, so the money is recoverable eventually. Stocks, took a beating across the board. The harsh part was the options. 25% of this months options expire on Friday. I have 4 days to recoup as much of that as I can, lick my wounds, and come out punching in December.

I'm slowly purchasing a contract here and there of these battered stocks, to try and catch a Christmas bounce.

Always perform your own due diligence before making any investment.

Will the DOW test 12K?

That is what the Rainman predicts...

The road ahead is grim, but of course it is not forever. The market is correcting, and there is a couple ways to deal with it. One is to bail out of everything, and then reinvest once the market reverses again. Of course, that sell off leads to further panic and more sell off. The other way is to invest in solid companies, and hold on to them, knowing that they will come back in the long run. That has been my way of handling this, and they do always come back, and usually more than make up for their losses.

So, will Monday begin the buy back process, or will it be another down day? With options coming up on Friday, anything can happen. While I am enjoying my new found option trading, I am more heavily invested in calls than I expected to be going into this last week before option expiration. I will be planted at my computer Monday morning looking for some graceful outs, and hoping not to lose too much money.

My biggest guffaw where my POT calls. I was certain that it had strong resistance at 120. Comedy of errors, and next thing you know an order that I thought I had canceled, had actually been filled. Now I have two sets of POT calls that I have to find a way to unload. Sometimes I do too much thinking with my keyboard...

On a brighter note, my CROX calls that I had written off are starting to see some renewed life, so I may be able to recoup some of that. Navellier is still considering CROX a strong buy, how much it will rebound by Friday is up in the air though.

MVO has probably been my most stable investment through all of this. It's approaching it's one year in existence, and people may be starting to see it's potential as a steady income investment. Read more about my opinion of MVO here.

Well, I have a lot of research to get done before the market opens, so I'll leave you with this thought. It's not really a loss, unless you sell it. Good Fortune.

Always perform your own due diligence before making any investment.

Spotlight on HTE

HTE:

I've mentioned this one before. Harvest Energy Trust is a Canadian Trust. The Alberta tax initiative passed, so the dividend for this stock lowered from about .38 Canadian a share to .30. (Dividend is paid monthly). What's funny is, that with the weakening dollar, I actually get .32 US for this, while I was getting .36 US before. When this came out last night the stock was at $28.00. At that price, the dividend yield was still 12%!

Well, some people panicked today, between that news and the DOW going down, and the stock plummeted to $25.70. That makes the dividend yield on this over 15%!!

Is it at the low? I am not sure, option week is next week, so the market will still be volatile. I am guessing you will be able to purchase this somewhere between $22 and $25 sometime in the next week.

With that dividend yield, the price wont last long. I'm snatching some up with my IRA money, if that check ever gets here.

Anyway, always do your due diligence, but when the dust settles, and the market heads back up, (which it always does eventually) this one will be back in the $27 to $30 dollar range, plus you will be getting an estimated dividend of $3.60 per year.

Here is a link to their dividend history.

Good Fortune!

Always perform your own due diligence before making any investment.

I thought I learned to lay golden eggs

But figured out today that I had just eaten some glitter.

At one point the DOW was down more 200 points today, but it made a comeback from three to four pm. That rally at the end of the day did more emotional damage to me than the 200 point drop did. Option trading isn't for sissys!

Anyway, it was just what the doctor ordered. My portfolio took a nice little hit which knocked my feet firmly back on the ground. So far my portfolio is down 6.87% for the month, so if I want to make my dream goal of 10% a month, I'm going to have to do some pretty smooth moves to make that happen. I'll keep you posted!

Always perform your own due diligence before making any investment.

DOW down 360 points!!!

Are you panicked? I'm not. Are you stupid? Valid question that will become clear within a few months, I think.

Anyway, first of all, DOW had gained over 150 points yesterday, and like I posted, yesterday was huge for me. The dow did take back some of my gains, but not all of them. How does the DOW drop more than twice as much but my loses don't?

Option trading. I made another sweet trade today, this time it was a day trade on NILE that netted me a 20% ROI.

I think the DOW will go up tomorrow, as traders bought beaten down stocks at the end of the day at bargain prices, and push them back up tomorrow to make their profits.

The other reason that I am not panicking is because I am not selling my core investment holdings at this time. I have some dividend payers, and some blue chips (some are both) for steady growth and income on this portfolio. I know that they will regain ground, and then some when the market recovers. How you may ask? Because they did when this happened in the spring, and again in the summer. In the mean time, if I can execute one or two option plays a day successfully, that 10% return per month is well within my grasp.

Someone pinch me, surely I'm dreaming.

Always perform your own due diligence before making any investment.

HTE

HTE has been a big winner for me, as I've said before. Both with it's dividend, and with it's growth. The next quarters worth of monthly dividends should be announced along with the November quarterly financial reports. I am showing a date of November 8th for that announcement on Ameritrade, but not finding the confirmation on their website.

Anyway, if you have been watching for an in on this one, watching close this week and next would be a good idea. I'm looking for an out, not because I don't believe in this stock, but because it has increased in value enough since I bought it that selling it at around the $31.00 level is the same as collecting the next several years dividends in advance.

While I probably wont be looking to add it back to this portfolio, it is definitely on my watch list for my IRA (the check hasn't arrived yet, grrrr.)

You can see that I added a couple of short term calls to my portfolio, CROX and PCU. I added CROX, because my girl Lizzy at IHUB likes it, and so does my favorite stock guru, Louis Navellier. The PCU, because I have been watching this stock and learned so many lessons from it, I decided to test and see what I had really learned.

We will talk about the CROX calls another day (or not, hehe). PCU on the other hand, bang - zoom! I was so in tune with PCU today, that my dad was on e-mail with me watching the level 2's to keep me honest. (Thanks Dad!) I kept telling him what was going to happen for the next 15 to 30 minute interval, and if it happened what would happen for the next hour. I think we were both in shock with how eerily my predictions came through. I'm staying as grounded as I can, but it's times like this that it's hard not to believe I can't fly. *wink*

Anyway, at one point I decided to sell half my PCU contracts for double what I paid, so my remaining contracts are free and clear. PCU went up over $2.00 a share in the after hours. If tomorrow is an up day, (this stock likes it when the DOW is on the rise) I am going to estimate that this stock goes up another $3.00-5.00 a share sometime between open and close tomorrow. That's if the DOW goes up...it will be interesting to see.

Always perform your own due diligence before making any investment.

Ana Crisan - Off Topic

Ana is a 20 year old artist in Toronto. Ana is homeless. This is her story.

Ana's flickr album: There are 241 pages in this album. They are all worth a look. The first few pages may are of the Zombie Walk 2007. New subject matter starts on page 8.

http://www.flickr.com/photos/anacrisan/

She has a lot of great animal and people photos. Here is one of my favorites.

I like a lot of her self portraits.

http://www.flickr.com/photos/anacrisan/page199/

http://www.flickr.com/photos/anacrisan/126031867/

This is her blogspot, if you made it this far, I'm assuming she has moved you.

http://spiritedaway420.blogspot.com/



Always perform your own due diligence before making any investment.

October Review Part 2

As I said in part one, I was very pleased with my October results. Here are a few of the things that I learned in October.

1. Have a structured investment plan, with percentages of money allocated for different goals / risk levels. I could be wrong, but I believe that at my level, having my money in one account maximizes my buying power. However, since I have multiple needs that need to be met, I needed an investment plan allocating percentages of money to both investing and trading.

2. It is ok to use margin responsibly. The amount of money I paid this month in interest was a tiny fraction of what I made by utilizing it instead of selling stocks at the wrong time.

3. Do not sell investment stocks as they move up.

4. Your percent gain on a trade is expected to be much less than on an investment, therefore your percent acceptable loss needs to be less. At my level, I'm looking to make about 3 to 5% on a trade. When I started trading I was allowing for about a 10% loss like I do on my investments. This was a huge faux pas. The loss tolerance needs to be commiserate with my target gain.

5. I personally, at my currently level of ability, am able to watch 3 stock level two charts for trading. I currently am trying to watch the charts for 7 stocks. This may be doable some time in the future, but not today.

6. Learn a few stocks rhythms, and trade them. I'm currently only trading upswings, but once you get good at that you can trade the same stock in both directions.

7. Do not invest or trade stocks that you have lost money in before, just because you like the stock.

8. When trading, find the trade channel. Buy low, sell high within the channel.


Always perform your own due diligence before making any investment.