Taking some Buy signals 1/2/12

I see some buy signals on stocks I trade. Some of them are HOG, PCP, SNDK and F. Taking initial positions on all these tomorrow with put options to hedge them, with the exception of Ford, that I am buying on a Stop market at 10.81. The actual timing to buy is not perfect but then it is the new year and I feel I need to follow my New Years resolution and start acting on my signals. I can always add to at more appropriate shorter term signals; but this gets me swinging.
Also see some signals to buy on IYR, SPG, FXC etc. but those I will wait a little. I am also long on TLT, TIP and have put options trading down on PBR and CAT. Some of these I will probaly regret as my main gate signal is long right now on SPY. I need to bias myself on the long side but the put positions taken were also based on my technical signals and I will not hesitate to exit and take my lickings if they turn against me. I was modestly positive on them last week.

Overall I was flat last year in my trading; just like the S&P 500. Nothing stellar. Our portfolio grew by the money we put in through 401K contributions at my workplace. We are saving signficant amounts and investing with moderate to low risk positions.

New Year Resolutions - Jan 1, 2012

It is time to make New Years resolutions. Let’s see – the usual ones are lose weight, save money, reduce debt, conquer some old weakness etc. As far as trading is concerned, my New Years resolution are

-         Fine tune my trading plan and stick to it.

-         Follow my trading systems.

Where could I do better? I have good technical systems certainly but the subtleties of their signals leave one in doubt and sometimes cause me inaction. So perhaps I need to add another couple of resolutions

-         Be clear on the rules I will follow for entry and exit signals

-         Then execute perfectly every time.

A friend of mine took a class from a successful day trader and he remarked that what impressed him the most about him was that with his rules there was a right time to enter a trade and a right time to exit. When the right time came, he would execute the trade.

The day he was apprenticing under this trader, his trade was doing very well. But you could not tell looking at the day trader’s expressions whether he was making money or losing it. He was executing his system perfectly. That is what I strive to do…My systems will make me the money if I keep the rules clear and follow it.

Let me be a human who can define the trading rules very clearly but also a robot that I may follow them perfectly.

And here is the SPY Up Signal! 12/23/11

Got the second Up signal on the markets in 2011 generated by my trading system on SPY.... lets hope the markets know that I got an Up signal on the S&P 500 (ETF: SPY) and cooperates.. I am long biased now but only very modestly invested in my portfolio, mostly cash. Will look to go long on individual stocks as I get entry signals.

SPY sets off Potential Buy Signal 12/22/11

It’s been a long wait for my system to trigger a buy signal on the S&P500 (ETF:SPY). Only had one this year and it was short lived. Well, I have another on 12/22 close of business. The expert commentary is Buy if SPY exceeds 125.39, which is the day’s high.

I am not one to predict too much long term. All I tell myself to do is follow the signals from the systems that I have created. Still, I smell a little long movement in the air and during the last week after the first huge 300 points DJ30 up day, I put in an order to close my PBR put positions at a profit and also TLT at a profit. I was long on TLT which rises when the markets falls. I was also holding put positions on PBR which made me money as PBR fell. But that could be changing, and it is time to reel in the profit it generated, before it turns into a loss! I think we will see some upside here

Why? Well, when I look at the chart on SPY, it is nudging the top of a resistance trend line. And my ICE and other short term indicators are point up. See chart below. It has been a long grind sideways this year within the narrowing triangle shown by the two trend lines in blue. If SPY breaks out of the trend line, there is likely to be a short term push for further movement in the same direction as traders would see their stops hit. Along those lines, I also sold of part of my SPY put options that provides protection against my long position in my 401K. Maybe this is the Santa rally we were hoping for, but volume is pretty muted. Still, if it breakout, volume can come back quickly as well as a surge, and I don’t want my contrary positions turning into a loss and holding back a rise in my portfolio holdings.

TLT Rising, PBR Falling 12/18/11

Last week I got stopped out of my GLD position. Kind of glad that I had a stop, although it still gapped down and pinched me for a loss. Since then GLD shows a down signal.

Long trade:

The TLT trade on the other hand looks good. TLT is iShares Barclay’s 20 year Treasury Bond fund. It is an ETF.  I remember the conversation with a friend regarding bond funds and his concern as to what would happen to bond funds when interest rates rose. The technicals have been quite strong for TLT and that is my guide. The last buy signal on TLT came on 11/2/11. There was also another short term minor buy signal on 11/30/11. That was my entry point. I think it is getting a little rich and I may bail soon. Still, there is no exit signal on TLT.

Short or Down trade:

I am also using short term put options to trade PBR which has a down signal. It is a fast swing trading system based on end-of-day, and I look to make money up or down. My last entry was as shown with an ellipse drawn around the down signal on 12/8. By buying put options, I can make money on the trade as long as PBR goes down. PBR has dropped and I notice also a breakdown of the support line drawn touching the previous bottoms. PBR is Petroleo Brasileiro. Brazil’s oil boom could be seeing its first bust.

No Change 12/10/11

No change from last week. My systems are pointing up with the exception of my ICE system on SPY. Both of my regular systems are saying Up for Dow Jones 30 (ETF: DIA) and for the S&P 500 (ETF: SPY). My 401K monthly system is partially long biased. Summary – I have long positions that I am hedged on. Meaning I make money if the market goes up but modestly. If it goes down, I lose money but modestly. The markets are hoping for good news from Europe and wants to go up. But the underlying fundamentals are severe and holding it back.

I am also long in GLD (Gold ETF) and TLT (Long term Treasury bond fund) and entered a small put position on PBR (Oil) – all actions based on my technicals of course and not fundamentals.

401K- No Change from last month 12/3/11

My monthly analysis of my two 401K accounts showed no change is required on my selections. The system is split between equity and bond funds as it is in a transitional state.  Until I get a clear signal to go long 100%, I will choose to stay where I am, which is at about 40% long equity funds. On top of that I am partially hedged with put options on my long equity positions, as this market is fickle and could drop in a hurry.

Last week felt good as my long positions all recovered back nicely. Still, Europe’s problems are long term. Last week we all learned that there was an inter-bank liquidity problem and they agreed to do swaps for the US dollar. Let me see… Europe’s currency is in shaky grounds, and may collapse, and the US Fed decides to swap our US dollars for the Euro?? Makes good sense doesn’t it, if you are a contrarian and in the business of bailing people out. Who will bail us out??? Or are we too big to fail?

I am attaching as examples, a couple of charts on funds I am holding in my 401K. One is an equity fund; the Artisan Mid-Cap Value and the other is the Fidelity Govt Income Fund.