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.

Happy Halloween! October Review, Part I

Well, my blog here is one month old, and I have now been trading full time for about 3 weeks. In part one of this review, I am just going to lay out some October stats. In part two which I will put together this weekend, I will write up a more comprehensive review of what worked, and what I learned.

One thing that I learned today, and worked well for me, is when dealing with the short term, momentum trades, if you get in late, you need to get out early.

On October 1 the DOW opened at 13895.71. On October 31 the DOW closed at 13930.01. That's a gain of 34.30 points, or .25%.

While I wont be disclosing the dollar amounts of my portfolio, I will say that my portfolio had a total gain of 10.25% for the month of October. I do take money out for household expenses this month, so my net portfolio gain was 7.10%. I must say that I am extremely pleased with these results. I set myself a "dreamer" goal of a 10% portfolio increase each month, which translates to an amazing 120% annualized. That's buy a house on the coast and retire kind of cash, if it could be maintained. In reality, I would be doing fine to make 10% or so a year after expenses. What that works to for this first year, is a 30% annualized return, or 2.5% increase per month total. I know that every month is not going to be an up month. I know that I will have months when things look bleak, but I have to say, when I can beat the DOW by 10% when I am just starting out, you have to know that it gives me a great deal of confidence that my goals are attainable.

Always perform your own due diligence before making any investment.

Short Term Plays

Well, they are coming at me fast and furious, and I'm not really taking any of my own advice. One of the things that I did decide, however, is that I am no longer going to be including them in my portfolio on the blog. I will just limit that to my long term hold items. I need to save time where I can, I'd like to be able keep up with everything working 50 hours a week, but as my absence for a couple of trading days shows, it's not happening with everything I'm trying to do right now, so I need to trim some redundancies. I will from now on only add a ticker to my portfolio if I have bought it as a long term investment, or held it for more than a week if it was initially considered a short term.

I have mixed emotions about how my short term trading is currently going. I don't seem to have my timing down, and I'm trying to watch too many at once, which means that I am not decreasing the number of stocks in my portfolio, which has been a goal for a few weeks now.

Another goal is to get up at 5 am, and it's midnight now. I am going to run through and update my portfolio on here, and then check out for the night.

Fed comes out with the interest rate announcements tomorrow, I'm hoping that it will end the day on a positive note. I have several short term positions sitting on the brink of their upside targets. While I've been holding them longer than I had planned, I only have a couple that I think will end up being losers. Time will tell!

Always perform your own due diligence before making any investment.

FLML ~ My favorite mistake

FLML is my favorite mistake, for the day anyway. This day trading is not for the timid or weak of spirit that is for sure.

As you can see by the chart below, I bought in around mid day (when I thought price would be good) at 11.17. It proceeded to head south, and then kept bouncing up to just under my price, and then go down again all afternoon. Disheartened that my timing was so poor, I stupidly put a sell order in for just a bit over my price at 11.23. Since there was at resistance at 11.25, I figured I would get a sell in before it bounced down again, in case I missed it.



Well, it worked in one way, that I did make 6 cents a share. The only problem is that had I not had that sell in I wouldn't have even see it hit 11.23 as it blew past it on it on the way up to the 12.75 area. I missed out on an additional 1.50 per share profit at least, on the sell side, and 40 to 50 cents on the buy side as well, had I been more patient.

So, the rainmans advice to me (thanks goingin60) was

"the mkt trades best 8am-10:30 then 3 pm to 4 pm-
itll be in my book-
Rainman 101 for daytraders"

You can see that had I purchased this stock anytime between 8 and 10:30 and sold anytime on the way down off of 12.75 I would have maximized the profit and made much more than 6 cents on this trade, making it worth the round trip I took.

So, if I am going to learn to play these momentum stocks, I think that I need to make a few adjustments to my strategy.

First, I need to get up at 5 am instead of 6. I am not getting up and running quick enough to get in on the ground floor of these momentum moves. Next, I need to choose one stock to follow the momentum of for the day, and try to get in before 10:30 (7:30 my time). Third, watch throughout the day, but I need to assume the sell point is going to happen either the between 3 and 4 that day, or the next morning. Lastly, do not make the buy and sell on the same day unless there is a doubt that it will hold up for sale in the am.

Now, for the 4 short term trades I am still holding, and at a loss.

EGHT: Went up 5 cents in after hours, so it is down 2% since I purchased it at 1.48. It has to break resistance at 1.52. Earnings are being released on November 1, next Thursday, after market close at 4:30. I feel at this point I may as well commit another week to this stock to see what earnings release gets me. I'm a little nervous with the after hours release time. However, if this makes any kind of run past resistance at 1.52, I will

GNVC: Up 4 cents in after hours to 2.50, down 6% since my investment. This one is posing a difficulty for me to exit. While it has been trending mostly downward, it is staying above the support at the 50 day moving average. I don't even care about losing some money on this one at this point. I just want to minimize the loss the best I can. In fact, now that I have typed that out, I realize that the loss I would take at 2.50 is acceptable to me at this point, so I have put a sell order in for that amount. If it clears, I have one less stock to track, if it goes higher, oh well. I have no signs pointing to any upward momentum on this stock. Part of me would like to put the sell price at 2.55, as it has been at or above that price the past few days, however the more practical side of me says I don't want to lose the opportunity to get this one out of my portfolio over 5 cents.

NCST: Currently my biggest headache. No action, no news, the chart looks horrible. I am down 16% on this one as it stands at $2.31, and I have no support again until 2.16. I've got resistance at 2.50 and 2.63, and I have to get up to 2.75 just to break even on this one. To add insult to injury, this is the largest of my 4 short term investments that I have had longer than I anticipated, and I have no idea how to divest myself of it. Interestingly, 75% of the shares of this company are held by insiders or 5% owners.

TVIN is my last. It is down 25% since I bought it, and the chart doesn't look too hot. Earnings release are out on Nov. 8th, so 2 weeks from now. It's late, and I need to go to get up early, so I'll look at this more tomorrow.




Always perform your own due diligence before making any investment.

PCU

By the way, I was able to get back in on PCU. Cost me about 4.50 a share more than I got for the covered calls, but I'm already up 6.95% since yesterday. If you haven't looked at the chart on this one yet, look now. This stock has increased 159% in price alone this year, and on top of that it pays a $1.60 a share dividend quarterly. While the shows an occasional price dip from time to time, that's just a buying opportunity, it shows no evidence of slowing down.







Always perform your own due diligence before making any investment.

ISV

Still having trouble resisting the short term plays, even though I am sitting on a 3 that are down right now (EGHT, GNVC, NCST). Got in on a few shares of ISV for fun at $1.28.

By the way, got into MDR at 43.90, and am up almost 5% already in just a little over 24 hours. Can't beat that. I still think this is a safe play up to about $50.00.




Always perform your own due diligence before making any investment.

McDermott International Inc ~ MDR

So, I had written 3 covered call options that expired on Friday. PCU got exercised, the other two did not. The exercise of PCU, left a big hole in my 30% allocation for blue chip growth. While I do need to cut back in other areas, I feel that I need to keep the blue chip growth allocation portion of my portfolio maxed, in order to get the most bang for my money, so I have spent this evening reviewing some options, and decided to invest in MDR.

Click here to review a business summary outlined by Yahoo. I just got home from spending the weekend with family in the Bay Area, so I am going to quickly lay out my reasons for choosing this stock, and then get to my review of my sell list, which wasn't done after close on Friday.

First of all, Friday was the 20th anniversary DATE of the crash of 1987 (the 20th anniversary DAY however falls on Monday). The fearful converted to cash in case history decided to repeat itself. Then this came out,

13:50 Morgan Stanley says crude oil "likely to come down sharply"; has "overshot fundamentals" - Bloomberg.

and across the board, Oil stocks started dropping, some in the double digit percentage points. I'm seeing that keeping your head while other's panic is a key component to this game. I'm seeing this as a huge buying opportunity in the oil industry, so I decided to look for a new blue chip in that realm to invest in. I could have increased my position in NOV, but decided against it, as it is already a good size portion of my overall portfolio.

Technically, the chart for MDR looked good. It has had two splits in the past 2 years, one on 9/11/07, and another on 6/1/06. The 10 day displaced moving average has been above the 50 day since 8/10/07. I calculated the return this year, using Fridays closing number which had taken a $5.00 a share hit from the previous day, and found that even with that 8.42% loss in one day, the stock price had increased in value by an amazing 148% in one year! Digging a little further, I found that the stock had doubled in price between the months of May and October. That's 100% ROI in 5 months, which would be 240% annualized.

Now, MDR has announced that it will have an earnings call on November 8th, 9am eastern time. There is always some risk in purchasing a stock before earnings but here are a few points that I have found that I feel limit that risk.

Positive surprises equate into higher stock prices. MDR has had positive surprises on 11 out of their last 13 announced earnings, and has exceeded earning estimates for the third quarter in all 3 of the past 3 years. Back to the chart, the 50 day low is 54.09, and I see support around 54.00. With those two things in mind, and my willingness to risk up to 10% of my investment, I have decided that a buy price below $59.49 is acceptable for this investment. Since I am very unsure of how the market will react tomorrow (where there be more panic, or will the sharks be snapping up all the bargains they can once they realize the sky didn't fall), I am going to low ball my bid at about $54.25. That is down a bit from both the Friday close of $54.35 and the after hours price of 54.77, but above my support support number. I wont be disappointed if I don't get in at this price, but I am going to bottom fish for it a little bit before I chase it up.





Always perform your own due diligence before making any investment.

Portfolio review continued.

Well, I managed to only purchase one new stock today, and sold off 3 (VM, LTUS, and GHDX). Didn't make my goal of just selling, but at least the net of the transactions was in the correct direction.

I did a little soul searching last night after I got locked out of here, and made a more concrete plan on my portfolio asset allocations.

35% Growth/Income: Current allocation in line, includes T, HTE, MVO, and UNWPX. I wont be adding to these positions, other than dividend reinvestments. I am looking to sell HTE in the $30-$34 dollar range. If I get that opportunity, I will find a replacement for it at that time.

30% Blue Chip Growth: Current allocations in line, PCU, NOV, RCI , MIR and NRG. I will most likely lose PCU and MIR due to the covered calls that I have out against them (a mistake I wont make again). I will replace those with some new picks from Navelliers Blue Chip Growth, newsletter, due out on October 22nd.

10% Zip Code Changers: These are my buy and hold pipe dreams, which are actually under allocated at this point, but I will not be filling them in, until I get the last category reigned in. Currently holding LBWR, ZMRAF, and SYBR.

25% Value / Short Term Trades: Here is my real weakness. The ideas in this category have been coming at me fast and furious, and I have been like a kid in a candy store, completely without any impulse control. I likie, gimme, has been my mantra the past few weeks. My focus is on trimming this area. I reviewed ASTM, CSCA, EGHT, GAI, AND GNVC in my post last night (though part of the GNVC research got lost), so on those 5 I will be brief.

ASTM: News out regarding some stem cell research. I expect the gap to fill and then some. For fun I have a 1.39 sell order out there, which would give me a 25% return on a 3 day trade. Not sure if it will click that high though, as there may be some resistance around 1.27 and 1.32.

CSCA: Pulled back slightly on no news. I assume it's just a little profit taking before the 20 year anniversary. I still like this stock.

EGHT: Chart looks good, and up again in after hours to 1.52. This one just feels like it wants to take off.

GAI: This stock is still not exciting me. Down on volume, so it may be being manipulated. 65% shares held by insiders. Looking for a graceful exit.

GNVC: Up in after hours, no news, chart looks good. I like the technical on this since I don't see any real resistance until 4, other than perhaps a bit at 3.25.



NOEC: This one has been testing my resolve, since I posted about the swing trades I was planning on this post. It is going lower on low volume, and has inside shareholders at 59%. I have an 8.70 sell in, and while I don't know when it will hit that number again, I have little doubt at this point that it will. I do see some resistance at 7.50 that I have to contend with though.



PRX: Looking for an out. The chart looks terrible. This was a buy based on insider trades and a press release. Hasn't been a good move so far.

TGB: I like this stock so much, that I bought it again even though I have already lost money on it once this year. It reached new highs, and I jumped on, to immediately watch the price dwindle. It's a copper play, and I like metals. This one continues to haunt me. Looking for a graceful exit.



TRMA: My feelings haven't changed much on this one since the last time I posted on it. I'm looking for a sale on the downside of whatever happens between $38 and $43. I am hitting some resistance at $35.40 I need to break through now.



YHGG: This was a kid in a candy store buy. Looking for an out.



NCST: My short term buy for today. Chart looks good, and up in after hours. Support around $2.16 while my 10% loss is at $2.48. Fifteen day low at 2.16. I feel like I bought this one too high, chasing it.






So, my lessons for myself today begin with no more trigger buys off the short term board. At the minimum, I want to know what my 15 day low and support levels are, then I want to put in my buy price so that my 10% loss lands around those levels. I think this strategy will help me in many ways. First of all, it will make me pause and see if it is really prudent to add another stock to my portfolio. Second, when the stock is added, I wont have to decide where to stop, since I will have made that choice by my purchase price. Thirdly, I think that being a more technically choosy about picking a buy price than just looking at the current level two quotes, I will not be getting into as many stocks, which is part of what I need...to limit this kid in the candy store reaction I am having to the multitude of earning opportunities that present themselves to me each day.


Always perform your own due diligence before making any investment.