WHAT WE DO? WE SELL OPTIONS FOR INCOME. WE USE THAT INCOME TO BUY DIVIDEND GROWTH STOCKS!
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Picks 09/21 – 09/25

New stock picks this week:

STEC Inc.

Existing & new holdings:

Symbol Qty Last Gain($) Gain(%)
FUQI 3 28.83 -0.51 -0.59
MED 6 19.54 7.21 6.55
STEC 3 29.48 -6.96 -7.29
V 7 70.66 44.87 9.98

Contribution this week: $100

Current capital exposure (total risk of the entire portfolio): -1.70%

New positions available to open: 1

Starting account value = $1,791.45

Account value = $1,735.29 (without margin)

Buying power = $948.50

[tag]Portfolio Gain/loss[/tag] this week = -3.13%

[tag]Portfolio[/tag] Gain/Loss for SEPTEMBER 2009 = -1.13%

Portfolio Gain/loss for 2009 = -24.87%

[tag]Annual Return[/tag] (CAGR): -32.95%


At the end of the month the stock market became a bit choppy and declining, but nothing major so far. It still may be just a regular small dip as the two previous ones.
Some stocks got hit hard such as Visa (V) which has lost 3.90% withing a day as it happened a few days ago to STEC I tried to search what happened to Visa and unless a Cartel fine in Hungary the only information or better say speculation I could find was that the mutual funds are closing positions to take gains and show some better results up in their quarter reports. There could be an impact of Sen. Dodds announcement of a new regulations for credit card companies. Who know. Definitely, the drop has no fundamental roots so the drop is just temporary and the stock will bounce back after this drop.

Today’s drop got very close to my stop loss level, so there are two scenarios which may happen next week:

  1. If the stock drops more on Monday, so my position gets closed on stop loss, I will apply the same strategy for buying the stock back as I did with STEC. I will use the Trailing Bar Momentum Reversal Strategy to trail the price of the stock lower and buy back for cheaper price on its reversal.
  2. Or if I won’t get stopped out, this definitely will be an opportunity to add more shares to my existing positions. Since my money management plan allows me to open a new position, see New positions available to open line above, I will trail the stock price down and buy more shares on its reversal.

I wish the second option happens on Monday and the stock will continue growing instead of dropping further down. We will see.


Are you interested in Reverse Scale Strategy and see how it works when implemented to even a small account?

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