Saturday, June 14, 2008

In Review, week ending June 13, 2008

Friday the 13th was the only bright spot in this dreary week. My trading account has taken a battering, mostly in my portfolio balance, which is down 22.5% from the beginning of June. Realized gains have also slid some, but are still up 7.95% for the month. This is because I did not close out of all of my open option positions by Thursday, and for the most part that was a bad idea. As expected time value has been greatly lost on many of my open option positions, and GS in particular moved the opposite direction that I needed it too. I do not know how many times I will beat my head against this wall, thinking this one time I will do better holding an option over Thursday night into Friday before expiry week. I lose every time, and yet I continue to make the mistake.

Between the battering my account has taken, and what I see as a large number of bad moves on my part these past few weeks has made me decide to step back a little from option trading, and concentrate more on studying the market, and making fewer plays, mostly equities. I am going to be doing an in depth analysis here of my FWLT play for those of you interested in watching along. A couple of other plays that I will be watching this next week are AAPL which so far has failed to confirm it's double top Friday, and TRA which has recently broken high out of a symmetrical triangle.

I've created a list of seasonal plays to start watching. I went through and picked only stocks with A ratings from Navellier's Portfolio Grader. You need a subscription to one of his newsletters to access this. I am currently subscribed to Blue Chip Growth. Like everything else, I use it mostly for ideas and guidelines, but the portfolio grader is a nice bonus. Rather than doing my own due diligence on the hundreds of stocks in a few sectors, I was able to plug my lists into the grader, and sort by rank. This narrowed me down to 22 stocks across the three sectors targeted for seasonal plays starting the end of July. Over the next week I will start evaluating the charts on the stocks. I will be looking for recognizable patterns of course using my Encyclopedia of Chart Patterns, but I also want to look at 2 year charts to see each stocks individual performance last year during the sectors "season". Once I've done that, I will start a daily tracking for seasonal plays. My goal is to get that started before the end of June.

I'm going into this week knowing that I will be looking at a blood bath on my stats by the end of the week, as open options expire worthless erasing my current realized gains. Because I will be scaling back my plays at the same time, I am hoping that my portfolios realized gains finds it's bottom for the month, and hopefully my account value found it's bottom this week (was down as much as 32.5% at one point). The good news is that I shouldn't have to withdraw any more cash for living expenses for the rest of the month, and my HTE dividend pays next week. That monthly dividend is always helpful.

Always perform your own due diligence before making any investment.

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