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.