Very nice up day across the board. Less than 5% of the stocks on my watch list had down days, the rest had up days. Most of this is attributable to remarks from Ben Bernanke. One day after he caused a late afternoon topple of stocks, he essentially restated the same thing but in a way that clarified what he meant.
Bernanke said "Highly accommodative monetary policy for the foreseeable future is what’s needed in the U.S. economy." Which, translated into layman's terms, means the Fed will still keep the stimulus and bond-buying train running as long as they deem it necessary. So not only was yesterday's dip wiped out, but now it looks like the market is back on it's "full speed ahead" mode. I would hate to be trading to the down side right now.
Another piece of positive news today involved our own government, who announced a $117 Billion budget surplus for the month of June. Very impressive considering they were anticipating a $39.5 Billion surplus. Granted, about $59 Billion of the surplus came from Fannie Mae, who paid back a huge chunk of the bailout money they received during the financial crisis.
As long as the positive hits keep coming and the Fed keeps pumping money into the system, there's no telling how high the market will go. I guess it's wise to be aiming up until the next FOMC meeting, where I'd sell and await further commentary from Bernanke, since he apparently can sway the markets very VERY easily.
Thursday, July 11, 2013
Wednesday, July 10, 2013
July 10th, 2013
The biggest news story of the day would have to do with remarks by Fed chairman Ben Bernanke at the end of the FOMC meeting today. Around 2:30 was the time of the announcement, and as you can see in the below intra-day DOW chart, the market dropped almost immediately.
Other minor "news" today included reports that the Federal government is taking a bigger and more active role in cracking down on insider trading.
Additionally, a report came out that (compared to other currencies on an international/global scale) the US dollar is loosing the "race to the bottom." Basically, a weak US dollar actually is a good thing because it means goods manufactured in the US are cheaper for other countries to buy, so other countries are more likely to buy goods we export. A strong US dollar means we are more likely to purchase goods from abroad rather than domestically. So essentially the report indicates that the dollar is strengthening, which means a likely increase in purchasing imports and a decrease in how many exported goods are purchased from our country.
On the whole the markets finished flat today. The DOW ended the day down $8.68 or -0.06%. The S&P 500 finished -$0.30/-0.02%. The NASDAQ finished up $16.50 or +0.47%.
Other minor "news" today included reports that the Federal government is taking a bigger and more active role in cracking down on insider trading.
Additionally, a report came out that (compared to other currencies on an international/global scale) the US dollar is loosing the "race to the bottom." Basically, a weak US dollar actually is a good thing because it means goods manufactured in the US are cheaper for other countries to buy, so other countries are more likely to buy goods we export. A strong US dollar means we are more likely to purchase goods from abroad rather than domestically. So essentially the report indicates that the dollar is strengthening, which means a likely increase in purchasing imports and a decrease in how many exported goods are purchased from our country.
On the whole the markets finished flat today. The DOW ended the day down $8.68 or -0.06%. The S&P 500 finished -$0.30/-0.02%. The NASDAQ finished up $16.50 or +0.47%.
BMY Practice Trade Update (07-10-13)
BMY continues to move counter to my original position. I haven't even looked at what the option price is, I only know that I SHOULD have exited the trade late July 3rd or early July 5th after I was already up 21%.
It looks to me like BMY is still going to go down, as is most of the market. Currently I think the market is topping out and getting prepped for a down move, it just isn't happening RIGHT NOW. But that's what's so critical about trading options - since they have a time decay element, I have to be right RIGHT NOW.
Anywho here's the daily chart...
Basically BMY is on a definite down trend for the near term, but it does have a fat pitch headed up indicating a sniper trade. I would expect this up move to last anywhere from 1 to 5 trading days, then dissipate and continue heading down. Even if this comes to pass, I STILL should have exited the trade with the 21% gain, because then I could have waited this up move out and re-entered the trade to go down AGAIN when it heads back down.
Just remember - this is what practice trades are for. You can take your lumps and kick yourself without actually loosing money. Just remember to treat it as though it were real so you can get your own emotions involved - fear, greed, etc.
It looks to me like BMY is still going to go down, as is most of the market. Currently I think the market is topping out and getting prepped for a down move, it just isn't happening RIGHT NOW. But that's what's so critical about trading options - since they have a time decay element, I have to be right RIGHT NOW.
Anywho here's the daily chart...
Basically BMY is on a definite down trend for the near term, but it does have a fat pitch headed up indicating a sniper trade. I would expect this up move to last anywhere from 1 to 5 trading days, then dissipate and continue heading down. Even if this comes to pass, I STILL should have exited the trade with the 21% gain, because then I could have waited this up move out and re-entered the trade to go down AGAIN when it heads back down.
Just remember - this is what practice trades are for. You can take your lumps and kick yourself without actually loosing money. Just remember to treat it as though it were real so you can get your own emotions involved - fear, greed, etc.
Monday, July 8, 2013
BMY Practice Trade Update (7/8/13)
I went into the hospital on 7/4/13 which was a day the market was closed, and came out yesterday on 7/7/13, which was a Sunday, so the market was also closed.
Basically I missed one trading day (Friday, July 5th) and apparently missed a strong move counter to my position. If I had closed my position before entering the hospital I would've been looking at a modest 21% GP on the trade. As it stands I am currently looking at a loss of $91 or 8.5% since the current bid/ask sits at $1.40/$1.42.
The charts, however, show that the bounce against me was purely technical off the lower bollinger band, and things SHOULD continue in the downward direction in my favor. And the chart...
Basically I missed one trading day (Friday, July 5th) and apparently missed a strong move counter to my position. If I had closed my position before entering the hospital I would've been looking at a modest 21% GP on the trade. As it stands I am currently looking at a loss of $91 or 8.5% since the current bid/ask sits at $1.40/$1.42.
The charts, however, show that the bounce against me was purely technical off the lower bollinger band, and things SHOULD continue in the downward direction in my favor. And the chart...
July 8th, 2013
Been in the hospital from Thursday, July 4th to Sunday, July 7th. Out of the hospital as of yesterday, ready to make my first post since not feeling so well...
Most of the news today revolved around the opening of Earnings Season, and how Alcoa (AA) lead the charge with a strong beat both on profits and on revenue. A lot of the rhetoric coming off of Wall Street is they expect a strong earnings season, so we'll see if that materializes.
On the negative side, rates for mortgages have climbed, making mortgages more financially unattractive than they had been. This comes on the heels of news that the housing market in general is making a recovery.
On the whole kind of a soft news day, although it'll be interesting to see how this earnings season plays out...
Most of the news today revolved around the opening of Earnings Season, and how Alcoa (AA) lead the charge with a strong beat both on profits and on revenue. A lot of the rhetoric coming off of Wall Street is they expect a strong earnings season, so we'll see if that materializes.
On the negative side, rates for mortgages have climbed, making mortgages more financially unattractive than they had been. This comes on the heels of news that the housing market in general is making a recovery.
On the whole kind of a soft news day, although it'll be interesting to see how this earnings season plays out...
Thursday, July 4, 2013
BMY Practice Trade Update
Not feeling well so this is just a quick update.
At the close on July 3rd, the bid/ask of BMY was 1.85/1.89 for a total position size of $1,295 or a GP of 21% so far.
And the chart...
At the close on July 3rd, the bid/ask of BMY was 1.85/1.89 for a total position size of $1,295 or a GP of 21% so far.
And the chart...
Tuesday, July 2, 2013
Practice Trade - Bristol Meyers Squibb (BMY)
Bristol Meyers Squibb (BMY) has been in a very narrow support/resistance channel for the last several days. Recently, the stock broke downwards through the resistance, rose back up, bounced back downward off the resistance, and formed a Fat Pitch (possible Home Run Fat Pitch) to the downside. On top of this the blue line is crossing the orange line on my chart, indicating the trend is now headed downward.
I'll be entering a practice put option trade on BMY using August puts that are one strike price in the money. The stock is currently at $43.99 so I will be using the August $44 Put options with a Bid/Ask of $1.50/$1.53. The options symbol is BMY_081713P44 for reference.
My current position size will be 7 contracts at the ask of $1.53 for a total position of $1,071.00. I will immediately put in a GTC sell order shooting for a 30% Gross Profit on the trade, making my GTC target on the position a Bid price of $2.19 or a total position size of $1,533.00.
And the chart...
I'll be entering a practice put option trade on BMY using August puts that are one strike price in the money. The stock is currently at $43.99 so I will be using the August $44 Put options with a Bid/Ask of $1.50/$1.53. The options symbol is BMY_081713P44 for reference.
My current position size will be 7 contracts at the ask of $1.53 for a total position of $1,071.00. I will immediately put in a GTC sell order shooting for a 30% Gross Profit on the trade, making my GTC target on the position a Bid price of $2.19 or a total position size of $1,533.00.
And the chart...
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