Monday, January 31, 2011
Sunday, January 30, 2011
This Maybe The Best Story of The Year So Far!
Text message blows up suicide bomber by accident
http://www.leaderpost.com/news/Text+message+blows+suicide+bomber+accident/4172966/story.html
Do You Do This Before Buying a Stock?
#1 Dividend Yield
Since I want to build a dividend portfolio, I look at the dividend yield as one of my first criteria. If the dividend yield is below 3%, it’s taken off my stock radar. Why is that? I wouldn’t be so picky in a different trading environment but I think that there are too many great opportunities on stocks offering more than 3% dividend yield. So, I decided to ignore the other tickers.
#2 Dividend Payout Ratio
A high dividend yield is good. A low dividend payout ratio is better. The one thing you want when buying a dividend stock is to see a consistent dividend payout in the future. This is why a low dividend ratio is great. I like when it’s below 50% but I will make exceptions (up to 80%) depending on the other factors.
#3 Dividend Growth
This is definitely the key behind dividend investing: holding the stock long enough to see the dividend grow to a ridiculously high yield. People who bought Canadian banks in 2009 didn’t have to wait long to see 8 to 12% dividend yield on their investment… This was a crazy opportunity! Too bad that I missed it…
#4 Sales Growth
Another interesting factor is to look at how the company is growing. I’m not too eager to see huge numbers but I certainly want to have something solid and consistent. Depending on the industry, this may vary between 5 to 200% 
. Mind you, I would stay away from 200% growth… those stocks are usually overrated by the time they reach that level and you are just surfing on speculation if you jump on the train at that time…
. Mind you, I would stay away from 200% growth… those stocks are usually overrated by the time they reach that level and you are just surfing on speculation if you jump on the train at that time…#5 Earnings Growth
Same here; climbing sales is good, making more money is obviously better. More money for the company means more money for the shareholders.
#6 P/E Ratio
This data really depends on the industry you are looking at. For Example, you won’t treat a high P/E ratio for a company like APPL or RIM as you would treat the same ratio for JNJ orCVX. I obviously like low P/E ratio as it gives a great indication that if the company does a little better than expected, there are great chances to see the stock on the rise.
#7 Trend
While this won’t be the deciding factor in my analysis, I love to match the stock trend with its 200 days moving average. The reasoning behind it is that it gives you an indication of how the market sees the stock. Then, you have a better idea if the stock will continue to rise or fall in the upcoming months. If you believe in the stock and you buy it in the downfall, you will know that it might go down even lower. So no surprise for you!
#8 Company’s Industry
As you may notice already, I always look into how specific sectors do on the stock market. This is also related to stock market trends. Since there is an important psychological factor while trading stocks, I think it’s important to take a look at the sector.
#9 Sustainability & Ethics
Since my socially responsible investing series, I am more sensitive to sustainable business models and management ethics. I am not naïve and I know that we can’t be aware of everything. However, investing in socially responsible companies is definitely a good move over the long term.
#10 Management Team
Are people going crazy? Is there a current management crisis? The best example I can pull out right now is the unexpected leave of Steve Jobs, CEO of Apple. Since he was the man who brought Apple back as a leader in the industry, some investors are panicking since he has gone on sick leave. Someone can’t change a company by itself (Microsoft is still going well even without Bill Gates) but it surely influence its direction.
#11 Company’s strengths
You need to be able to establish a company’s strengths before buying it. This is how you will know if the corporation will be able to face a crisis and seize opportunities.
#12 Company’s future opportunities
Speaking of which, knowing where the company is heading gives you an indication of its future growth. When I think of cigarette makers for example, I’m not too sure where they are heading. They are currently betting on developing emerging markets while North Americans are trying to stop smoking… weird business model…
#13 Company’s weaknesses
While it’s important to know where you are strong, knowing where you are weak is crucial. You can then assess potential risks and see how the company can cope with its flaws.
#14 Company’s future threats
Looking at the past (numbers) is good, looking at the present is important, but looking at what is coming up next is very important. When I did the LLY analysis, I noticed that most of their patents were expiring soon while their pipeline is not that interesting. Things could go sour in a few years…
#15 Understanding the business
There was one a very wise man that said: If you can’t understand in what you are investing, forget about it. Warren Buffet’s investing lessons should be engraved on the computer you use to make trades. If you don’t understand the industry or how the company is making its profits; just forget about it and pick another one.
Saturday, January 29, 2011
My Dear Friend San form Nifty Charts Created This For Barter on $UST
Let me say this...San from www.niftycharts.com is one of the best technical analysis I know. He is also a great person....Please view our comments as he posts daily here. Thanks San!
Blunt Force Used in Death of White House Aid? (fishy)
http://www.delawareonline.com/article/20110128/NEWS01/110128028/Med.+examiner+releases+Wheeler+cause+of+death
This relates to an article I posted earlier this month. I wish someone would do more investigating...This stinks of three day old tuna salad sitting in a house in Mexico with no air conditioning in the heart of summer!
http://theslipperyslopeinvestor.blogspot.com/2011/01/conspiracy-theory.html
Market Correction by Doc Barter
29 January 2011
Market In Correction Mode ?
The S&P500, I usually use to view the broader market, closed on Friday under 1281 points. This is in my opinion is an important juncture as it reflects weakness.
In past 8 weeks I have pointed out that SPX needs to show a drop over 15 points and close before we can assume a potential change of trend.
The reason given was that since November rally we have not seen a daily decline over 15 points especially on a close. I also pointed out that Earnings Season is a good strategy to exit positions on a high note.
In my article dated 23 January 2010 I mentioned that the Nasdaq Composite is confirming weakness.
Link:
In my article dated 25 January 2011, I pointed out the importance to monitor Emerging Markets.
Link:
26th of January 2011, I explained my Portfolio Logic. Unfortunately, Lotion Boy did not separate the Market Musing from the Day Trade Articles, so it might be confusing. Just follow the header
Link:
On 27th of January 2011 during trading hours, I made a remark in a chat with our buddy user Doogy and Rampage, that 1299 SPX is a good enough for me to buy Index Shorts. E.g. SDS, DXD,QID, TWM and EPV with a view of an intermediate correction ahead of us.
We shall see if it was the right decision in weeks to come.
The above articles were warning signs and actions to be taken. The question we are all asking is “ IS THE TOP IN PLACE”.
In order to determine it without jumping to early into a conclusion we shall view some data and charts below.
Nasdaq 100
The index showed weakness ahead of SPX and created a sell signal as 5 ema crossed 10 ema to the down side. The daily chart shows a kind of a double top, RSI below 50, MACD negative crossing and Stochastic pointing to the downside. With all these negative indicators on the daily, funny enough NDX closed + 0.10% on weekly basis.
The weekly chart has no sell signal !
(chart courtesy of stockcharts.com)
S&P 500
Having explained earlier how important a close of over 15 points is for a potential trend change is, we did receive a huge warning on Friday as the index plummeted 1.79%. The daily chart does point to a change in trend but has only an early sell signal. SPX closed on weekly basis -0.55%.
The weekly chart shows no sign of a sell signal and maintains a positive stance. One day of heavy selling does not justify to jump into an early conclusion. The SPX must drop below 1260 to confirm a down trend.
These are facts. I like to see the RSI drop below 50 before jumping into bearish mode.
(chart courtesy of stockcharts.com)
Dow Jones
In my Day Trading Article dated 28 January 2011, I pointed out that the Dow has not seen 9 consecutive weekly gains in past 10 years. After digging a bit, the last time that happened was 1995.
I expressed my bearishness for Friday trade and the fact that Dow needs to drop 120 points to close the week in minus to
avoid a record breaking attempt. This call was spot on and I benefited with some handsome paid shorts. The Dow closed the week with – 0.41%
The daily chart is similar to SPX and does not show a valid sell signal.
The Dow needs to go below 11600 break to confirm a change in trend.
(chart courtesy of stockcharts.com)
As we can see, all above 3 indices had not a real negative week to jump into a full blown bear. I giggle a bit seeing over excitement in the bearish camp. A conservative trading approach is - > await the real signal and do not trade on behalf of excitement.
Gold-GLD
Regarding my favorite sector, my early December 2010 given sell signal is still intact. It was a positive move on Friday, but as we do not want to jump into bearish mode on SPX yet, we also do not want to jump into full blown bullish mode on Gold just because we saw a handsome bounce on Friday. Gold is down 0.57% and the daily and weekly chart are still confirming a sell signal. I would like to see the 5ema cross the 10ema to upside first before I turn real bullish.
The American Gold Bugs – HUI has a very similar picture as GLD does, may be a tiny touch better. Having said this, I allocated on Thursday a tiny 2.5% long in PM stocks to test the water.
(charts courtesy of stockcharts.com)
GLD
HUI
SUMMARY:
In my previous articles I showed some price indicators flashing a sell and we received as a bonus a sharp sell off on Friday. Lets review the following indicators based on Friday’s closing.
NYSE Tick
McClellan
NDX Summation
Advance-Decline Market Breadth
Up/Down Volume Market Breadth
Dow Theory
For our Dow Theory lurkers, the Transport Index has broken the 50MA showing first sign of divergence to the late strength of the Dow Jones.
Summary:
Gold - > still has a valid sell signal
Silver -> still has a valid sell signal
HUI -> still has a valid sell signal
USD/EUR -> $ may bounce from here as it is short term oversold.
Stocks still outperforming bonds
Bonds signaled a valid bounce and I expect more gains
VIX jumped over 20% and is creating soon a buy signal VXX had some serious up volume!
Natural Gas has a valid intermediate buy signal
News Alert:
Unfortunately I have experienced the lack of comments for efforts made to write articles even so a lot of lurkers are viewing it. I am considering refraining from further articles
Legal note:
The article is intended solely for The Slippery Slope Investor Blog.
Any copying or distribution without the authors consent is prohibited.
Friday, January 28, 2011
Thursday, January 27, 2011
Daily Doc 28th of January
Day Trader – Trading Plan 28 January 2011
Yesterday I said “ we see a drop to either 1292-1291.25 or even 1288.25-1287.50. We saw a pre-market low if 1289.25 when Japan bond news came out and during the US market day we held 1291.25. My assumption that we will see a new high at 1297.75-1298.50 was right on the spot.
If anyone might have noticed, the Dow Jones is on the verge of a 9th straight winning week and I hardly remember when that occurred the last time. Surely not in the last 10 years. In order not to break records, the Dow needs to loose 120 points!
Today’s important support is the 1293.50 area. A break would be a bad sign. Having said this, the bigger up trend support is 1288 for now.
This area most likely will hold on the first trip down, but somehow I have the feeling we see it fall today.
It would take a break of 1298.50 to keep the bulls going. This area was sold too many times yesterday and between 1296.50-1298.50 I saw some handsome selling yesterday. First support for today is 12997.75-1298.50 and it might offer a handsome short opportunity if the futures , trading currently 1293.50, are managing to get up there again. As of late, they usually do but lets not take things for warranted.
I sold this very morning my 2324 @ 2320 and took 4 points. I am still holding 1295 & 2331.50 shorts. Considering that the Dow looks weak and the fact is up 9 weeks in a row, makes the odds of a nice downer on Friday in my favor.
Good trades to all of you
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Daily Doc!
Day Trader – Trading Plan 27 January 2011
Yesterday an update was posted that first resistance would be the likely target to exit short 1291 held. 1287.25 came spot on and I exited at 1287.75 and went long until 1294.50-1295.
At ramapage’s chat room we discuss the intra day targets.
As for today, I reckon we see a drop to either 1292 – 1291.25 or even a drop back to last break out area 1288.25 1287.50
I am holding 1295 & 2319 short and would exit at above levels.
Since we are still in an up trend, it means buy the dips unless the trend is changing. An entry at 1288 with a tight stop would make sense and target would be re-test 1296 or even a new high at 1297.75-1298.50. The latter would be a short entry for a couple of handles.
As long as 1287 is not broken, I do not see any reason to fight the trend.
Once 1287 is broken, there is ample room to the down side to join and short bounces is back on the agenda.
Meanwhile, stay with the trend and good trades to all
Remarks:
Please click on the adverts as Lotion Boy made a great effort to update his site constantly. He promised to have an automated chat service too so we do not need to click refresh site all the time. His effort is highly appreciated and we shall support him.
Wednesday, January 26, 2011
My Trades Today!
First Trade:
ES Short 1294 - 5 cars
Stopped out 1295.25 - 5 cars
- $312.50
2nd Trade:
ES Short 1294.50 - 5 cars
One Scale - 5 cars at 1293.00
+ 375.00
Third Trade: Dutch's Special
Long 1292.75
First Scale 1294.00 - 3 cars +$187.50
Second Scale - 1 car 1295.00 - +112.50
Runner - 1 car 1296.00 - $162.50
+ $525.00 Today (thus far)
Last trade...another Dutch special..
Long ES 1294.75 - 2 cars
Sold ES 1295.50 - 2 cars
+ 3 ticks!!! lol
+ 75.00
Net - + $600.00
ES Short 1294 - 5 cars
Stopped out 1295.25 - 5 cars
- $312.50
2nd Trade:
ES Short 1294.50 - 5 cars
One Scale - 5 cars at 1293.00
+ 375.00
Third Trade: Dutch's Special
Long 1292.75
First Scale 1294.00 - 3 cars +$187.50
Second Scale - 1 car 1295.00 - +112.50
Runner - 1 car 1296.00 - $162.50
+ $525.00 Today (thus far)
Last trade...another Dutch special..
Long ES 1294.75 - 2 cars
Sold ES 1295.50 - 2 cars
+ 3 ticks!!! lol
+ 75.00
Net - + $600.00
Daily Doc! Jan 26 2011 Two For One - Good Read
Day Trader – Trading Plan 26 January 2011
Yesterday important support and resistance were discussed. The ES could not break 1292 and retreated pre-market from this area. 1283.50 as important support, and pointed out, was broken and 1278-1278.50 support was held.
After visiting the important support of 1278-1278.50 the futures were very volatile and ended on a higher note.
Short term the market moved back to up trend but 1292 must be broken to the upside to keep the bulls going. I doubt that will happen before FOMC release. My opinion is more of a 2 sided action until the release is out.
1290.50-1292 would be for me a short entry and since expecting some volatility, I would exit at first support 1283-1282.50
Having said this, a stop above 1292 is required as a break could open the door for bulls to aim for 1297.50-1299
Watch out for break of 2310.50 on NQ as well. It must go in tandem.
I doubt that 1282.50 will be broken before the release, so if it is hit before FOMC release, it does offer a long entry with a tight stop.
Should we see 1297.50-1299 before the FED release, this is an area I would like very much to go short.
Whatever breaks after release and sticks ( either 1292 or 1282.50), it is best to join as I expect a very strong directional move today.
Good trades to all
Portfolio Logic
Yesterday I pointed out the weakness of risk capital smaller emerging markets. It was clear that since November 2010 these markets are in a down trend and more down side is likely.
Let me repeat it again -> Funds tend to sell risk capital of emerging markets first before they do the very same in developed markets!
I was explaining in November 2010 my opinion and action to slowly reducing exposure in Equities. ( long term buy signal was August 2009)
Summary of Reduction of Exposure
- end October and early November emerging markets
e.g. 50% of holdings
- 6 December 2010 exit all CDNX stocks held
e.g. high risk junior miners & explorers
- 6 December 2010 exit 35% of all large & mid cap precious mining
- between November and December 2010 reduction of high yield bonds
from 15% to 5%
- 1st week January 2011 exit 35% of all large cap Oil & Gas / Energy
holdings
Portfolio is running 40% equity core positions (mostly Commodity Sector)
- between November 2010 and January 2011 purchasing shorts .
Emerging Markets 7.5% , Basic Material & PM Sector 7.5% and lately
EU Market and US Market Shorts ( 1265-1291) of 5%.
A total of 20% Shorts !
Cash level is running at 35%
Portfolio Plan:
I am planning to slowly sell the PM Sector shorts very soon. Basic material shorts a little bit later. Emerging Market and Developed Market Shorts remain until further notice.
I am considering to add 2.5% more US Index shorts later today.
e.g. NDX, RUT, SPX, DOW
Gold
Buying opportunity between 1300-1265 USD
PM Stocks
We should see a little bit more downside, but with Gold 30-70 USD away from a potential bottom, the downside here is limited. Suggest to pick your favored PM stocks and monitor any positive volume.
I started already to take up humbled positions in NEM, ABX, IAG last Thursday & Friday, 20 & 21 January 2011.
Summary:
Gold - > still has a valid sell signal
Silver -> still has a valid sell signal
HUI -> still has a valid sell signal
USD/EUR -> $ may bounce from here as it is short term oversold.
Stocks still outperforming bonds -> will change soon
Bonds still on a valid sell signal -> may bounce very soon
VIX volatile yesterday
Natural Gas has a valid intermediate buy signal
Dow & SP500 have no sell signal yet !
Remarks:
I do apologize in advance for my rather humbled English language & grammar skills as it is not my mother tongue.
News Alert:
Please visit after market hours “Slippery After Dark” and add your favorite music or video clip to share with Lotion Boy and other slippery users on his website J
Legal note:
The article is intended solely for The Slippery Slope Investor Blog.
Any copying or distribution without the authors consent is prohibited.
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