Bought BNI call spread

BNI seems to be bouncing off of the 50 day EMA, which was resistance all the way down and now is support.  Bought the October 70/75 call spread for 1.90.

IBM Headfake - possible triple top

I was originally looking for an out on April 16... but I stayed with it. If I exited the trade, I would have been whipsawed like crazy. The trend is still upward. Volume has been increasing since then, but it is up against the highs made on April 9 and April 3, a possible triple top. We will watch tomorrow.

IBM reversal patterns

IBM closed April 9 with a hanging man candlestick, and dropped for the next few days. Then on April 15 it closed with a hammer, and April 16 closed higher (up 2.58, almost 3%) on a little heavier volume. However, we still have the double-top formed April 3 and April 9, and it seems to be having trouble poking its head above the 200 day moving average. We will watch it.

JOYG at Fibonacci resistance?

JOYG went up 2.64, or 11.7%, closing at 25.07. There is Fibonacci resistance at 25.09. It is also at the regression line from March 3. It is above the 50 day moving average.

IBM possible reversal pattern?

IBM closed today at 101.70 with a hanging man candlestick, just above the 200 day moving average. I will be looking for a close above its previous high of 102.22 or we may have a reversal. Volume is also decreasing. The rest of the market went up over 3%; IBM did not participate, with only a 0.5% increase.

It is above the regression line that stretches from November 20, 2008 - the regression line is also parallel to the support line from the same date. Is this significant?

JOYG

Bought JOYG July 30 calls on gap up opening with higher than average volume. 0.76 standard deviations out. Perhaps a little far, this one is kind of a lottery ticket. The 20/80 full stochastic and the 14 day RSI is showing oversold. On Balance Volume is steadily rising. I could not spot any Fibonacci retracements that appeared to work.

IBM made new high

IBM broke above the previous high of 99.60 and above Fibonacci line of 100.43 on increasing volume. Bought IBM July 110 calls at 3.67. The hourly chart of IBM is showing support becoming resistance, and it is banging its head on that line right now.

As of close on April 2, the 110 strike is 0.36 standard deviations out.

TUP broke above resistance

TUP broke above 17.45 and closed at 17.63. I re-entered at 17.52. The next area of Fibonacci resistance is between 18.38 and 18.84 - I would like to get a tighter range but I'm still getting used to Fibonacci analysis.

Watching TUP for re-entry

TUP is banging its head against overhead resistance. There is major price level at 17.09, and Fibonacci resistance at 17.45. Waiting for a conviction breakout above 17.45.

Waiting for Re-entry

Most of my positions got stopped out on Monday, and it appears that I may have to chase the market higher for re-entry - in other words, I may have to re-enter at higher prices than I sold out at. However, the market has listlessly traded sideways the last couple of days, so rather than chase at this point, I will wait for conviction one way or the other. I am particularly watching IBM to see if it makes a new high above 99.60 - there is also Fibonacci resistance at that level.

Also on IBM, there is a candlestick pattern that shows that the strong hands may be selling to the weak hands - the March 30 candlestick started out lower than the previous day, but ended higher, with the close at the middle of the body of the previous day, on volume lighter than the previous two days.

I would also like to see the S&P go above 800 and hold; if it does not, we may revisit 741 - which would be nice, because that would be a perfect head and shoulders bottom.

So at this point, I have spotted my mistake in selling too early - I should have realized that the highs would have been re-visited, or I should have set my stops tighter to sell at higher levels. But at least I sold at profits, and I will wait in cash for conviction one way or another.

DOW, T, WTW, and TUP all stopped out

DOW sold at 8.36, for a 6.1% gain (plus a dividend).

T sold at 24.98, for a 10.73% gain.

TUP sold at 16.29 for a 31.58% gain.

WTW sold at 19.15 for a 0.62% loss.

I will need to get back into WTW to capture the dividend. Other than that, I believe I will sit out the market for the next day or two to see what happens.

DOW - Broke support on March 27

Looking at the hourly chart, DOW Chemical (DOW) has followed a trendline from its low on March 9. It started as a support line that became resistance on March 20. A new support line formed on that day that is almost parallel to the old support line.

The price broke this second support line on March 27. As soon as it broke, the trading turned sideways for the last two hours of the day, and into after hours trading. The trendline dictated that it should have closed above 9.20, but it closed at 8.96, and went slightly higher to 9.02 in after-hours.

I am having a hard time with Fibonacci on this one because DOW hasn't traded at this level for 20 years. There appears to be a 61.8% retracement level at 8.78, but I'm not sure how useful it is.

The previous low was 8.36 on March 25, with another area of support at about 8.50.

I will use 8.36 as the stop limit.

I will make sure to get up early tomorrow and watch this one in pre-market.

T makes higher lows

Looking at the hourly chart since its low on March 9, AT&T (T) continues to make higher lows. However, March 27 has shown a few doji on the hourly chart, and the stock has traded sideways (slightly downward) the last four days. The low of 25.64 on March 25 was broken slightly by the low on March 26 by four cents; probably not enough to cause any real concern at that.

There is also some major support at the 25.16 level which was touched on March 20, 19, and 18.

A stop limit 2.5% below 25.62 will protect my position with a 10.8% gain, and provide me with a little room in case the 25.16 level is breached. T will not give its next quarterly report for another three weeks, so there is no need at this time to take into account the dividend.

24.98 is the stop limit.

TUP - Protecting a run-up

Tupperware (TUP) is bumping its head at a price level reached during the week of 7-24-06 and the three weeks following of between 17.06 to 17.17. This level has been touched at multiple times in the past all the way back to 1998. The last candlestick (March 27) is a Doji. There is a nearby Fibonacci retracement of 17.45. I will set a stop limit at 2.5% below current value. The ex dividend date is not for at least 10 weeks, so I need not take that into consideration. This will protect me with a 31.6% gain.

Stop limit of 16.29 GTC was set.

WTW following pennant flag formation

WTW (Weight Watchers) is following a pennant flag formation, visible on a one-hour chart from March 4 to March 27. The lower trendline extends from the price low on March 4 upward to the low on March 27; the upper line is actually flat, extending from the gap-up opening on March 5 to the high on March 26 (significant overhead resistance). I will watch this one for a pennant formation breakout.

A stop limit should be set at 19.19, which is the low on March 25. However, I want to capture the 17 cent dividend paying on March 31, so I will set my stop limit at 19.02.

Opening positions as of March 28, 2009

1-16-09 Bought CAT EI, May 45 Call options @ 2.59 for expected move higher on earnings announcement. As it turns out, they missed, and these calls got decimated. They are close to worthless so I will hold to see what happens.

3-10-09 Bought COP May 40/45 call spread @ 1.57 on expected move higher in oil prices.

3-17-09 Bought XJZ FL, June 12 Call options @ 0.27 on expected news of further bank stabilization plans. Sold part of the position on 3-23-09 for 0.43. Allowing remainder to run.


3-4-09 Bought DVY @ 28.41 for diversification and its high dividend yield (6.2%)
3-9-09 Bought T @ 22.56 for high dividend yield (7.3%)
3-9-09 Bought 50 oz Silver for inflation hedge
3-10-09 Bought TUP @ 12.38 for high dividend yield (7.1%)
3-17-09 Bought DOW @ 7.88 for high dividend yield (7.6%)
3-23-09 Bought WTW @ 19.27 for high dividend yield (3.6%)
3-24-09 Bought AVP @19.06 for high dividend yield (4.4%)

First post - why I'm doing this

This log started on Saturday, March 28, 2009. I became serious about trading nine months ago. I made some money, and I lost some money over that time. What prompted me to start trading for myself was the fact that most mutual funds underperform the market. The standard advice of "the market always goes up" has been proven false. The standard advice to young people was "don't worry about dividend stocks" and "don't worry about bonds - those are for older people" is a load of garbage. I was almost fully invested in growth stocks, and those are always the ones hardest hit during downturns. The fact is, dividends and bond yield payouts could have helped me considerably during the downturn. So I have decided to go against the standard advice and diversify my holdings.

I am 35 years old and watched my 401(k) plan and IRA head south in a hurry; I am thankful that it happened at my young age, because I at least have a chance of recovering from this disaster. But I am now inherently distrustful of anyone who manages money. I have learned (the hard way) that the only one who is interested in protecting and growing your money is you. Everyone else is simply interested IN your money - as in, transferring it from your pocket to theirs.

There are three ways to learn: you can read about it, you can observe someone else doing it, and you can pee on the electric fence. I have decided at this time to follow methods one and three. Every trading book I have ever read tells you to keep a log of what you buy and why, when you've sold it and why.

So this is my trading log.