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Posted by Martin October 03, 2011
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Korea Halts Trading After 5% Slump


South Korean shares opened sharply lower Tuesday as investors offloaded stocks following a slide on Wall Street and amid concerns that Greece is slipping closer to a default.

The Korea Exchange briefly halted program trading to alleviate some of the selling momentum after the main Korea Composite Stock Price Index share index fell over 5%.

The Kospi was down 5.1% at 1,678.62. Losses are broad-based, with construction, technology and chemical stocks leading the decliners. Bellwether Samsung Electronics was down 5.2%, while LG Display was 7.1% lower.

“The Kospi will likely be pressured further down from here with investor sentiment fast freezing up,” said Tong Yang Securities’ analyst Lee Jae-mahn.

The Korean won was also under heavy selling pressure, with the Bank of Korea suspected of stepping into the market to support the local currency. The dollar was last at KRW1,199.80, compared with KRW1,178 late Friday.

Korean markets were closed Monday for a national holiday.

Source The Wall Street Journal




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Posted by Martin October 03, 2011
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Shorting SPY once again


Based on the current trading I decided to enter my puts at this point. So I bought 2 contracts of November SPY puts @111 strike. If the market reverses I will quickly liquidate this trade, but if it continues down I will stay riding it.

Happy Trading!




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Posted by Martin October 03, 2011
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Profit taking


I decided to liquidate some of my positions in SPY and FFIV. SPY started to diminish due to time decay so I decided to sell my puts and I will buy November puts since the market is slumping down. I will see at the end of the trading session today.

Change The Way You Trade Forever

Definitely the market broke thru its support today. Let’s see if it stays there. Before the end if we stay below its original support (now resistance) I will buy November puts to ride this market further down to $100 level where the next support is.

We are definitely breaking the consolidation pattern, so hold your breath & hats, we are going down.

FFIV doubled my money (investment) and I took 112% profit on this. It stalled at its support, time decay started working against me and in October there will be an earnings report published, so time to take profits. If it breaks support I might enter by buying new puts.

Happy Trading!




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Posted by Martin October 03, 2011
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SPY – will support hold?


Today’s trading will be crucial. The market opened at its support line at $112 level. Will it hold this support or will we break it? If we hold, we may spike back up and stay in the corrective pattern. If we however close below this support line, the market will be poised to slump down to $100 level. Watch today’s trading carefully!

Happy Trading!




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Posted by Martin October 03, 2011
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Stocks set to dip on fresh fears about Greece

Stocks set to dip on fresh fears about Greece

By CNNMoney staff October 3, 2011: 7:39 AM ET
Premarkets.

NEW YORK (CNNMoney) — On the first trading day of the fourth quarter, U.S. stocks were poised to fall at the open; following a sell off in world markets, as investors fret over Greece’s ability to avoid default and a slowing global economy.

Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures were all lower ahead of the opening bell. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

Investors are watching closely as Greece attempts to deal with its debt crisis. Greece has slashed spending, reduced wages and raised taxes in an attempt to bring its debt under control.

But even still, the debt-ridden nation will miss key deficit targets for this year and next, according to the draft budget announced by the Greek cabinet late Sunday.

There isn’t a whole lot of optimism that Greece will pull though. Out of 22 economists surveyed by CNNMoney, almost all of them believe Greece will default on its debt by the end of next year. The third quarter is over. Good riddance!

Stocks were hammered Friday, with all three major stock indices shaving more than 2%, as investors remain worried about the debt crisis in Europe and the outlook for global economic growth.

The losses capped the biggest quarterly drop for the S&P 500 and the Nasdaq since the fourth quarter of 2008. The S&P 500 lost 14%, and the Nasdaq fell 13% over the last three months. The Dow fell 12% in the quarter, marking its worst quarterly performance since the first quarter of 2009.

In addition to fretting over the sovereign debt crisis in Europe, investors are anxious about slowing economic activity in the United States and around the world. The Federal Reserve and the International Monetary Fund both warned of increasing risks to the global economic recovery.

World markets: European stocks were sharply lower in morning trading. Britain’s FTSE 100 (UKX) fell 1.6%, the DAX (DAX) in Germany tumbled 2.3% and France’s CAC 40 (CAC40) dropped 2.1%.

Asian markets also ended lower. The Hang Seng (HSI) in Hong Kong plunged 4.4%, while Japan’s Nikkei (N225) shed 1.8%. The Shanghai Composite (SHCOMP) is closed this week for holiday.

Economy: Wall Street will get the Institute for Supply Management’s August manufacturing index, as well as construction spending figures from the Commerce Department.

Economists expect the September ISM index will fall to a reading of 50.5, from last month’s 50.6. Construction spending figures are expected to decrease 0.5% — coming in above last month’s 1.3% decrease.

Major auto manufacturers will also report auto sales for September at 3 p.m.

Companies: Shares of Eastman Kodak (EK, Fortune 500) dropped almost 60% Friday. Trading halted on the stock several times, amid rumors that the camera maker has hired a law firm for advice on a major restructuring or bankruptcy filing. The company later denied that it is planning bankruptcy moves. Shares rebounded 46% in premarket trading Monday.
Europe’s Debt Crisis

In response to a question following the China 2.0 conference at Stanford University — Jack Ma, the CEO of Chinese Internet conglomerate Alibaba Group, said that his company would be “interested” in buying all of struggling online media firm Yahoo (YHOO, Fortune 500). Shares of Yahoo rose almost 6% in premarkets.

Apple’s new CEO, Tim Cook, will take the stage at the Town Hall auditorium on Apple’s (AAPL, Fortune 500) Cupertino, Calif., campus Tuesday to unveil the new iteration of the iPhone. Rumors are swirling over whether there will be one new iPhone or two. Shares of Apple edged higher in premarket trading.

Currencies and commodities: The dollar gained against the euro and the British pound, but lost ground against the Japanese yen.

Oil for November delivery lost 81 cents to $78.39 a barrel.

Gold futures for December delivery rose $37.60 to $1,659.90 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury edged up slightly, pushing the yield down to 1.90%. To top of page

Source CNN Money




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Market ends third quarter with heavy losses

Market ends third quarter with heavy losses

As I wrote in my previous post, investors were just buying a pure wishful thinking, hoping for better times, improvement and trying to avoid recession (in their thoughts). Although some data from US came better than expected, they weren’t strong enough to offset bad data from Europe.

So watch the European debt crisis, since it will drive markets in the near future.

The debt crisis in Europe is “all that anybody cares about,” said Dan Greenhaus, chief global strategist at brokerage firm BTIG. “The worst-case scenario is a disintegration of the European banking sector.”

Concerns about government debt problems in Europe intensified in the third quarter. Investors are afraid that Greece could default on its debts, setting off a banking crisis similar to the one that occurred after Lehman Brothers collapsed in 2008.

In addition, economic activity in the United States and around the world has slowed. The Federal Reserve and the International Monetary Fund both warned of increasing risks to the global economic recovery.

“It’s been a very uncomfortable quarter for investors as news from Europe and now China has filtered into equity valuations,” said Lawrence Creatura, a portfolio manager with Federated Clover Investment Advisers.

Source CNN Money

Since we know what fundamental data drive the market down, we also can see that the market is in bearish trend from technical perspective.

SPY

The market (here represented by (SPY)) wildly broke thru the resistance of the pennant pattern, see the note #1 on the chart, a few days ago. It immediately dropped down to a long term support on $122 level (see large green arrow) and bounced back. On hopes and wishful thinking the market rallied up, shortly broke thru the pennant resistance line (magenta line) and long term resistance on $118 level (thin blue line at that level). Then the market could rally all the way up and re-test the short term resistance (see small green arrow with note #3), but it didn’t have strength to do that, reversed and fell back down (see the reversal pivot marked by a large red arrow). The wild fall following this short term reversal can now be another re-test of the support at $112 level or we will broke thru. However, in short term perspective, we are seeing new lower highs (see arrow with tag #2 pointing to the new short term trend), which confirm that the market is in bearish trend and there is no sign (yet) of strength.

With all bad news coming from Europe, economic slowdown, it is very likely that the market will continue down. We will see in the following weeks. Being said that, I am staying bearish and holding my put positions in SPY. The pre-market data point to another drop down opening on Monday (it can change by then, however), so wait for further slope down trading next week.

Happy Trading!




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Posted by Martin September 28, 2011
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Market slips after 4 day ride up.


As I expected, the market lost its steam. Seller stepped in and they were selling. Stocks struggled to rise. Durable goods orders slid as expected. Today morning I bought my SPY puts to ride this downturn. At this point it seems like the market is trading in a range within a bear market. We may re-test 112 level.

Happy trading!

Change The Way You Trade Forever




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Posted by Martin September 27, 2011
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Stocks end with intraday losses


As I was expecting a few hours ago, this market wasn’t strong enough to sustain the gains and closed lower on intraday basis. SPY opened at $118.53 and closed the day at $117.55, not a huge loss, but an evidence of losing steam. Also periodicals are speaking about downside risks outweighing upside.

I will see what the market will do overnight and if it confirms itself in falling (the futures will point to a lower opening) I might buy SPY puts.

Happy trading!




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Posted by Martin September 27, 2011
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The market continues up on hopes and wishfull thinking


Investors are tired, exhausted and frustrated seeing the market tanking for this long time without any bright light at the end of the tunnel. Therefore they are literally buying any news and today is a great example of them trying to convince themselves that we are out of the forest and we will be growing or being at least neutral. Everybody fears recession and everybody wishes to avoid it.

Change The Way You Trade Forever

But look at the chart. The market is clearly in defensive mode although Euro-commissars are claiming to find a way to get out of the debt crisis.

The first news which came out today morning was a creation of a special fund and the existing fund supposed to save the Eurozone will be backed up by more money poured in it. Markets in western Europe climbed up. But Spain denied such measure and all hopes were wrecked again. The markets eased their optimism.

The impulse for this rally were news released by CNBC that the special fund will be created by European Investment Bank and funded by European Financial Stability Facility (EFSF). The fund would be buying problematic bonds from troubled countries and issuing its own bonds serving as collateral for ECB. However, no one yet confirmed this plan or news and some other politicians consider this plan as bizarre.

Well, at least, even though this news was not confirmed and sounds unrealistic, it was enough to push markets up high.

When you take a look at current SPY chart, you will see that the market gapped up. At this point, at 12:30 MDT it is up at $119.33, but on a very low volume. The Bollinger bands are very tight today, so the market is poised for a move, spike, breakout. It doesn’t say which direction, but it says it will happen.

The market broke the pennant resistance as I spoke about yesterday and this morning, but on very low volume and it hit a downtrend channel resistance line. Also the gap was very large and on volume (once again).

When looking at today’s chart, overall trend, lower highs, fantasy news pushing the market up, I think this market will go down either tomorrow or on Wednesday. Therefore I decided to wait until the last ten minutes of today’s trading and then buy puts on SPY. I will wait where the market will most likely close today and make my decision based on this.

Happy trading!




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Posted by Martin September 27, 2011
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Funny Money

Funny Money

It is really funny watching what the market is doing these days. Optimism replacing pessimism within days. Last week we heard what the worst week for the markets it was since 2008 and today we see a great optimism again just to be replaced with a pessimism next week.

Change The Way You Trade Forever

Today, the news are trumpeting how optimistic the investors are about the crisis in Europe being resolved. Then I found the following quote:

The plan — reported by CNBC — would allow troubled banks to swap bad debt for bonds backed by the European Investment Bank.
But doubts remain that the action, should it occur, would bring the crisis to a complete resolution given the continent’s extremely heavy debt burden.

Source: CNN Money

C’mon guys! Is this a reason for extreme optimism? You bet no! It will just move the debt from one pocket to another. It will solve nothing and the debt burden will be back again. Those doubts as mentioned in the quote will arise larger and stronger.

This market is poisoned to fall. Do not fall into a bull trap. If you take a look at my yesterday’s chart and look at the latest peaks, highs of the chart, they are lower highs. Let me post it again with the red dots indicating those new highs.

SPY

What trend do you see forming here? Of course, it can all change and the market can turn up and be growing, but it is quite unlikely at this point. And why do I think the market will continue down? What is that catalyst? It is European debt, which is far from solved.




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