I AM BUYING AAPL AND WFT

I know it there has been a hiatus in my blogs, but my trading has continued despite me not blogging. I just haven't had the time to post my trades.

Since time is still and issue, I am going to suggest two stocks to investigate that I am buying tomorrow, Monday.

AAPL and WFT.

Basically, I watched AAPL consolidate for two months and I believe it will head up due to the strong industry it is in. I am putting in a buy price near $198.00. This was bought based upon my "A system" triggered on Dec. 27th, 2007.

I do, however, have more confidence in WFT as it appears to be breaking out of a cup with handle. My buy point is going to be around $70.40. This was bought based upon my "A system" triggered on Dec. 27th, 2007.

Good luck trading.
JD

JUST WANTED TO LOOK AT THIS - USD/JPY Forex Pair Trading Strategy

I got an email and I wanted to see how this works. I am just going to put this picture up for my info and if you can figure it out, go for it. You could also tell me what you think.

My key points are 4 day EMA and 10 day SMA on Fx.

MARKET HAS BOUNCED AND I THINK IT IS A BUYING OPPORTUNITY

I have been waiting for a bounce and I finally think it is here. Bought in on ATW a few days ago based upon my A system. It did retract 5% today. I know that is a lot, but it was in below average trading volume. Still good news and I am holding on.

CRZO just hit a buy signal based upon my A system. Buying as close to $50.66 is the best. Target is $61.20.

LOGI has hit a buy price of $34.84 based upon my MH system. My target price to sell is $36.58 which is only 5% gain, but it still allows a trader to move in and out of stocks and make quick gains.

Good luck trading.
JD

BEGINNING TO THINK MARKET MAY TAKE A BOUNCE (at least for a little while)

I like the looks of ATW. It sat sideways during this whole downturn in the overall market and today it took a large influx of cash and rose tall.

ALDN also strikes a cord for buying. HOLX is bouncing off support. I see buying opportunities coming us so let's see what will happen.

Good luck trading

JD

BUYING THE BRITISH POUND

Since I am waiting for the stock market to find a bottom and begin to turn up, I am going to trade ETFs (exchange traded funds) that correlate to the price of foreign currencies. One that is showing a buy signal is the British Pound and goes by the symbol FXB. My intent is to get in around $207.50. I know that price is high, but it meets my trading rule that I am going to call 3/22 PDI/MDI. Yes, that is in code so when I take my capitalist attitude and create the website I want to create this will be one of my systems that I will trade. So here it how it goes. Once the candlesticks and the trend bars at the bottom of the screen are both green, that is a buy signal. Also, the opposite it true - once the candlesticks are red and the trend bar at the bottom are both red, sell.

So for the model portfolio that I have set up, I am finally going to buy something after being in cash for the past month or so.

Good luck trading only FXB.

JD

ARE WE GOING TO BOUNCE OR FALL?

The markets are beginning to test the lows back in August and I am wondering if this is going to be support or not. The $127 mark on DIA is going to be a major key point for support. This is equal to 12,700 in the DJIA. If that mark is broken to the downside, get ready for a big fall to 11,700. The number of puts continues to rise and this is a signal for a "contrarian" that we are ready for a bounce. I am still going to short stocks or buy puts in this market until it proves to me it is ready to rise.

Stocks that are hitting signals to short:
OYOG
MTL

The GBP/USD is getting close to the target price of 2.032. Hopefully it will hit the target for another profit.

GOOD LUCK SHORTING.
JD

For those who wish to walk on the wild side:
OSIP
TDG

ICAHN BOUGHT INTO GENZ, SHORT GBP/USD AND CLB

GENZ is bouncing off its 50 day moving average after breaking out from a huge consolidation. This is an opportune time to buy. Another reason is that the investor Carl Icahn announced he has bought into GENZ. Follow the leaders.

If you trade forex, my signals just alerted me to sell GBP/USD as near to 2.0517 as possible. Goal is 2.0320 which is only a 197 pip move.

CLB is showing signs of breaking down and creating a diagonal put spread may be feasible based upon the overall negative tone of the market.

GOOD LUCK TRADING.
JD

OPTIONS : Long-term Diagonal Call Spreads or Put Spreads

Options come with risk so this is for those who are willing to accept risk and try to make more money than just buying stocks alone.

Here is the set up for a DIAGONAL CALL SPREAD:
Outlook - Bullish
Options -
1. Long ITM 12 month call (10% ITM)*
2. Short ATM** or OTM*** 3 month call
*ITM = In The Money
**ATM = At The Money
***OTM = Out of The Money
Reasoning - Profit from rally in market when IV is higher than SV. If market rallies strongly, roll the short call out 3 more months at the same strike. If market closes below short call, resell new 3 month at the same strike as the first short call.
Set up - ADX cross MDI. Better if breaking out from a base and market in a rally.
Trade - SPY, DIA, QQQQ, or growth stocks.

Now for the opposite.

Here is the set up for a DIAGONAL PUT SPREAD:
Outlook - Bearish
Options -
1. Long ITM 12 month put (10% ITM)*
2. Short ATM** or OTM*** 3 month put
*ITM = In The Money **ATM = At The Money ***OTM = Out of The Money
Reasoning - Profit from a falling market when IV is lower than SV. If market falls rapidly, roll the short put out 3 more months at the same strike. If market closes above short put, resell new 3 month at the same strike as the first short put.
Set up - ADX cross PDI. Better if breaking out from a base and market in a rally.
Trade - SPY, DIA, QQQQ, or growth stocks.

DESPITE TODAY'S NICE RISE, JUST TAKE AIM AND WAIT TO PULL THE TRIGGER

I know that today was nice, buy just be patient for this may only be a small blip. I am still nearly 90% in cash. Haven't found any real signficant buys.

I am still going to sit on the sidelines.

Good luck trading.
JD

Personal note: 10/20/50 LIFC. SNHY to FSTR (ADX cross) GPOR to SCHW (MACD cross) or FCSX.

COGN IS BUCKING THE DOWNWARD SPIRAL, PCR IS SHOWING A "CANDLESTICK KICKER"

So here is the update on my model account. Yes, it does go down, but in limited amounts.

I dislike buying in a downward market, but I was playing around and watching COGN. Just using this as a study.

Check out this article for candlestick kicker on PCR.

Article from www.workingmoney.com

The Candlestick Kicker
by Stephen W. Bigalow

Do you chase a stock that is already up 12% on the day? What do you do when one of the companies you own stock in announces an earnings warning? What do you do when one of your stocks, previously uptrending, turns around and plummets after announcing an SEC investigation? Or the Federal Reserve Board announces a surprise rate hike, and bond prices gap down from one minute to the next and move in the opposite direction of the previous trend?

Not surprisingly, these situations paralyze most investors. Fortunately, candlestick charting can keep you from falling into traps. When such a price action takes place, you will usually find a kicker signal on a candlestick chart. The kicker signal has powerful implications.

The one basic factor built into candlestick signals is that they are formed by the cumulative knowledge of all the investor input, the buying and selling, of a trading entity or trading entities during a certain time period. The candlestick signals tell you exactly what investor sentiment is doing. The kicker signal illustrates a dramatic change in investor sentiment.

Candlestick analysis allows investors to project trend reversals with a relatively high degree of accuracy. One misconception about candlesticks signals is that there are too many of them to learn. But of the 50 or 60 candlestick signals, there are only about 12 signals that occur most of the time — the doji, the bullish and bearish engulfing signals, the hanging man, shooting star, hammer, the inverted hammer, the bullish and bearish harami, the dark cloud, the piercing pattern, and the kicker signal. Knowing these few signals will sharply improve your analysis of trend reversals and make learning candlestick analysis much easier.

Having this analysis capability in your trading arsenal allows candlestick investors to have their portfolios positioned in the correct direction when a move occurs. Understanding the psychology of how signals are formed provides investors with better foresight in where to have positions placed.

Big dramatic moves! What do you do? Many investors act like deer frozen in headlights, but candlestick analysis tells you instantly what to do. An announcement can completely reverse a trend direction. If a trend has been in progress, whether strong or mild, and a surprise announcement is made, how that formation rolls out will tell the investor what to do. One possibility is observing the previous day's candle formation with the open price, then the closing price continuing in the direction of the existing trend. After the announcement, the price alters its direction, opening at the same level as the previous day, a gap open, and proceeding to close in the direction opposite of the previous day. This is known as the kicker signal, and it is a high-powered candlestick signal. This signal should never be ignored. It can create huge profits. Candlestick signals are fractal. They can occur on a daily, weekly, or monthly chart just as well as on a one-, five-, or 15-minute chart. The Japanese rice traders identified approximately 50 reversal and continuation signals through centuries of developing candlestick signals. Of these, the 12 major signals will provide more trades than most investors will ever need.

THE KICKER
The kicker signal, which may be the most powerful signal of all, works equally well in both directions. Its relevance is magnified when occurring in the overbought or oversold area but is effective no matter where it appears in a price trend.

Consider the investment sentiment that built this pattern. It is formed by two candles. The first candle opens and moves in the direction of the current trend. Investors are continuing with the established trend, closing the price further in the existing direction. Then something occurs to change the direction of the price; usually, surprise news causes this type of move. The signal illustrates such a dramatic change from the current price direction that the new direction will persist for a good while. (One caveat to this signal — if prices gap back the other way in the next time frame, liquidate the trade immediately. This does not happen often, but when it does, get out.)

The second candle opens at the same open as the previous day, a gap open, and heads in the opposite direction of the previous day's candle. The bodies of the candles are opposite colors. This formation is indicative of a dramatic change in investor sentiment. The candlesticks visually depict the magnitude of the change.

Understanding what forms a kicker signal produces a strong trading discipline for investors. If you own a position that has had a nice steady uptrend and one morning you see an announcement that causes the price to open below the open of the previous day's bullish candle, a trade decision can be made immediately: Get out on the open. Candlestick analysis makes it simple. If an announcement alters the direction of the current price trend with such magnitude that it is gapping the price down below the previous day's open, you can make one assumption. The investor sentiment of the current uptrend has been dramatically altered. A gap down below a previous day's bullish candle now has the strong potential of forming a bearish kicker signal. With the understanding that the kicker signal is one of the strongest reversal signals identified, logic dictates that you do not want to remain in a long position with strong downside indications. This is common sense investment practice depicted by candlestick signals. The probabilities indicate that a negative announcement, causing the price to gap down, would not be opening lower and immediately continuing back up.


Figure 1. Bearish kicker in Amily Pharm.













AMILY PHARMACEUTICALS. A gap below the previous day's open clearly demonstrates a strong change of investor sentiment. If long, it would be in your best interest to close the position.

If an announcement creates a gap up in price above the previous day's open, in a stock downtrend, an investor should take advantage of a large profit potential in the earliest stage. A gap up above the previous day's open signifies that whatever was announced has now dramatically changed the investor perception of that price. If you wake up and see an announcement that is gapping the price up above the previous day's open, you can assume that the strength of the announcement is now going to create a bullish kicker signal. Even though the price has moved a good percentage from the previous day's close, a potential formation of a kicker signal is usually the prelude to a strong uptrend. This allows an investor to act immediately versus worrying about how much the price is already moved from yesterday's close.
FIGURE 2: BULLISH KICKER SIGNAL
As illustrated in the RadioShack chart in Figure 2, whatever announcement created the kicker signal produced new investor sentiment that developed into a strong uptrend. The strength of the uptrend was immediately apparent, with the price gapping up well above the previous day's open.

Announcements can dramatically change the prospects of a company. Do all kicker signals create strong price moves? Not always! However, based upon the circumstances that create the signal, the results expected will occur with such a high percentage of positive results that executing trades upon seeing the formation or the completion of a kicker signal would dramatically improve the returns of a portfolio.

SUGGESTED READING Bigalow, Stephen W.Profitable Candlestick Investing, John Wiley & Sons. [2005]. High Profit Candlestick Patterns, Profit Publishing.

Short SBAC based upon this "kicker."

MORE THAN 65% OF ACCOUNTS NOW IN CASH

Wow!!! The markets are taking a hit and I have been knocked out of positions on the past 3 times that I have bought (BLUD, SNHY,CMED). That puts the majority of my accounts into cash. So the best option for me at this time is to ride out this down turn and wait until the market corrects itself.

GOOD LUCK NOT TRADING.
JD

CHECK OUT CMED, AGAIN

I just wanted to show a chart that I really like, CMED. Granted the overall market is not really in good shape right now, but I like this chart for many reasons and I will explain. If you pan back and look at a 2 year chart you will see that 2 years ago the stock reached a high of $43.51.






Now the stock is sitting near that previous high after breaking abovce it a few days ago. If you click on the second chart and look at the top blue line, you will see that was the previous high 2 years ago and we have zoomed in on the most recent months. The lower blue line is a "trend line" that looks as if the stock is getting "support." I have held this stock waiting for a further breakout so hopefully it will do so in the next week. I am buying shares near $43 to $44.

Good Luck Trading.
JD

PROTECT YOURSELF

Did those California fires have you scared about your assets? I'll bet you think that you are safe telling the insurance company all of the items that you own. Don't fool yourself. Insurers will try to get out of paying for anything.

My solution: http://knowyourstuff.org/

'Nuff said.

OUT OF NBG, BUYING SNHY

So I have to admit I got out of NBG right before the close yesterday because I saw $14 as a point where the stock may take a rest because it was near the top of a trend line. (Click on the chart to the left to see what I am talking about) I was happy with the return that I had so I decided to take profits. I am glad I did. Today it opened down and sometimes it pays to draw these trend lines.

Here are the transactions for NBG in my retirement account.

10/31/2007 NBG SOLD 100 SHARES OF NBG AT $13.81 $1,380.97
10/31/2007 NBG SOLD 1000 SHARES OF NBG AT $13.83 $13,829.78
10/31/2007 NBG SOLD 433 SHARES OF NBG AT $14.00 $6,054.90
10/31/2007 NBG SOLD 292 SHARES OF NBG AT $13.81 $4,032.45
10/31/2007 NBG SOLD 100 SHARES OF NBG AT $13.83 $1,382.97
10/31/2007 NBG SOLD 275 SHARES OF NBG AT $13.83 $3,796.19
10/31/2007 NBG SOLD 100 SHARES OF NBG AT $13.83 $1,382.97
10/31/2007 NBG SOLD 100 SHARES OF NBG AT $13.83 $1,382.97

10/18/2007 NBG BOUGHT 105 SHARES OF NBG AT $12.4499 ($1,314.24)
10/1/2007 NBG BOUGHT 95 SHARES OF NBG AT $12.81 ($1,223.95)
9/27/2007 NBG BOUGHT 1100 SHARES OF NBG AT $12.9199 ($14,211.89)
9/27/2007 NBG BOUGHT 100 SHARES OF NBG AT $12.9199 ($1,298.99)
9/27/2007 NBG BOUGHT 1000 SHARES OF NBG AT $12.93 ($12,937.00)

I did buy more GPOR since I see it sitting at more "support" and added more shares at $21.74. Let's see if this one pans out. I am also interested in this stock since oil prices continue to climb.

I am also buying SNHY since it is near "SUPPORT" after what I believe is to be a "cup with handle." If you click on the chart you will see that a cup with handle is forming and a support trend line drawn on this chart confirms this. Remember, this is MY presumption that it is at support. The market may prove me wrong, but I am a believer.

Good luck trading.
JD

A LOT OF WAITING FOR THE FOMC TO MAKE AN ANNOUNCEMENT

There was a fair amount of selling today ahead of the "Fed's" announcement tomorrow. The FOMC is going to announce whether or not interest rates will stay the same or if they are going to move it up or down. The consensus is that they will cut interest rates again which is what I am hoping for. Sure it will weaken the US dollar, but it will allow stocks to rise in price.

I was scouting stocks again since I am looking for buys after BLUD and AMZN knocked me out of a couple of positions. I got in on GPOR and I am hoping it finds "support" at the current price of $21.00. Currently it is sitting at an 8% loss from where I bought it. So if it drops only 2% more, I am getting knocked out of another stock.

RIG is hitting $120 and is acting as "resistance" currently. I pray that it it going to breakout since oil prices continue to rise. I guess oil & gas drilling is really not a good industry to invest in currently.

I am going to put ABAX on a target to buy. Click on this chart to see where I believe the proper buy point and maximum buy point is. Once could say that the proper buy point is lower than $27.10 since there is a "cup with handle," but the breakout was so big I am willing to move my buy point up a little bit.

Pray that the Fed cuts interest rates.

Good luck trading.

JD

ACTU IS UPGRADED TO MARKET OUTPERFORM

ACTU has broken out this morning and is currently up 13% based upon the fact that is was upgraded to market outperform. When I made the suggestion to buy this stock, I said that it was risky to buy stocks priced under $20. Well this one paid off. It could turn out to be like BOOM three years ago where I garnered 400% within a year. Can I do it again? We will just have to see.

PDE still is sitting just below a buy point so I will keep my eye on this one.

As far as the negative trades, GPOR turned the opposite direction yesterday after buying it and is currently down 6% from where I bought it. If it breaks down and I lose 10%, I'm out. See, I don't win on every trade.

If you are following forex, both the GBP/USD and the NZD/USD are both doing well and have continued their positive upward movement.

Here is a picture of the model portfolio that I am using as my performance standard. In June, 2007 it had $20,000 in it and currently sits at $46,383.

Good luck trading.
JD

TWO STRIKES WITHIN A WEEK

BLUD took a digger on the news that their acquisitions in the late 90's are going to be investigated. So I took my 10% loss and walked away.

So I am on the prowl for new buys. Hunted down HURN and GPOR. HURN is sitting at support and by clicking on the chart you can see the proper buy point and maximum price that I would be willing to pay.

GPOR is sitting at support. Click on the chart to look for the $23.48 buy point.

Good luck trading.

JD

GIVE CMED A LOOK

CMED is looking even better. Right now it is sitting near a 1 1/2 year high and appears to be ready to break out. I am setting my sights on $43.23 which is today's closing price for my buy point.


If PDE breaks above $37.31 on higher than average trading volume, consider this one to buy during a base-building episode. This is only for those who are willing to risk it a little more than those who wish to play it conservatively.

As for Forex traders, click on this chart to see my recent buy/sell signals for NZD/USD and notice that today there is a buy signal. Don't look at the chart and expect it to show you UP versus DOWN days as I have changed the candlestick colors to suit my buy and sell signals with a confirmation signal at the bottom. I am not going to give away my secret as to what my indicators are so this is how to read this chart.

1. If either the candle or the trend bar at the bottom of the chart turn green, wait for the trend bar or the candle to turn green respectively to confirm a BUY signal.

2. If either the candle or the trend bar at the bottom of the chart turn red, wait for the trend bar or the candle to turn red respectively to confirm a SELL signal.

GOOD LUCK TRADING.

JD

I need this as a personal note. Watch GSF. Group #73 same as RIG

DAMN AMZN!!! THIS JUST SHOWS THAT EPS REPORTS CAN HURT A STOCK

I was basking in the glow on Tuesday when AMZN broke out and gained 10%. I was then burned by the fire when I checked on the market to see that it was down 15% due to warnings on future earnings. In light of that, I sold out for a loss of 5% since I originally bought at $90.

See, I don't win on every trade, but I do cut my losses quickly.

I do get to brag about my warning about the Dow Jones Industrials, DIA, turning down in the October 16th blog. I mentioned that one of the indicators called the MACD was turning down and I didn't like the feel of the market. In my personal account, I placed a trade in options called a bear call spread. The "bear" means that is I expect the market to be "bearish" or to move downward. The "call" means that is the type of stock option I bought and sold. (I know it may be confusing but this is for those who have learned how to trade stocks first. Be confident with stocks first, then you can investigate how to trade options) The spread means that I bought on "call" and sold another "call." My spread was a December 142 call that I sold, and I bought the Dec 145 call for $1.27. As of today, the spread is worth $0.90 which is a 30% gain in one week. My target is a 50% gain so I am waiting for this move.

Good luck trading.
JD

MONEY MANAGEMENT - FOREX AND STOCKS

This segment is more applicable to forex trading due to the high amount of risk versus trading stocks. The same can be applied to stocks, but I am willing to risk a lot more in stocks so I don't use this 2% rule in stocks.

The most common formula that investors use is risking no more than 2 percent of the total portfolio value in any given trade. If you have an account with $100,000 in it and by applying the 2 percent formula, you would be willing to risk up to $2,000 in a single trade. Then you must determine the number of forex contracts you can buy without risking more than $2,000.

If you set a stop loss of 100 pips on a trade, you are willing to risking is $1,000 per contract since each pip is worth $10. (100 pip loss x $10 = $1,000). Knowing this, you can now calculate how many contracts you can purchase by dividing $2,000 by $1,000 per contract. Meaning you can trade 2 contracts. This formula determines how much you are willing to invest from your total portfolio in any single trade.

In light of this, I am going to go long GBP/USD due to one of my trading signals being triggered. Let's see how this trade transpires. Remember, if you can't trade forex you can trade FXB which is the stock version so you will want to BUY the stock symbol FXB.

Good luck trading.
JD

ARTICLE ON REAL ESTATE INVESTING

The quickest path to finding true foreclosure bargains
Following the facts on discounts can help you find the real deals

NEW YORK (MarketWatch) -- You've heard a lot (probably too much!) about real estate market problems and especially the rapid rise in foreclosures. But as a real estate investor you're picking up big-time "bargain" signals on your antennae.

The headlines are ominous: some 243,000 foreclosures in August, up 36% from July and 115% from August 2006. There's blood in the streets.

So how do you get from "there must be bargains out there" to "how much will I save, and where are the best bargains?" I like to guide any buying decision as much as possible with the facts. But while lots of foreclosures are out there, how good an opportunity they might be was hard to know. Until now.

For sale and on sale

RealtyTrac, the same real estate portal and analysis group that supplies monthly national foreclosure statistics, also calculates the average discount-to-value by market -- that is, how much foreclosed homes actually sold for vs. their estimated market value in their markets. So -- bingo -- you've got a good indicator of how good an opportunity you're looking at.
Search on "foreclosures by state," and then click "view (state) foreclosure trends," and you'll get a nice snapshot of foreclosure filings, actual sales, average sales price and -- most of all -- the discount-to-value.

National trends

Nationwide, in the three months June through August, some 68,426 foreclosed homes sold in 2007 vs. 54,886 in 2006. The average sales price dropped from $271,000 to just over $239,000.

The discount-to-market ratio increased slightly from 76.42% to 77.68%. How do you read this ratio? It is the actual foreclosure sales price compared to the perceived market value of the home. So 77.68% means, on average, you'd get just over a 22% savings or "discount" on your foreclosure purchase. That's down from just over 23% a year ago.

The best (and worst) around the country

So, now the fun part: a state by state look at where the best deals and biggest changes are happening:

From June-August 2006 to June-August 2007, California, Nevada, Michigan, Massachusetts and Arizona showed the greatest increase in the number of foreclosure sales, while New York, New Jersey and North Carolina posted the biggest decreases among states that had 1,000 or more foreclosure sales.

But while California heads the list in sales, the discount is relatively small -- one of the five smallest in the country at only 17%. The best deals are in troubled Rust Belt or manufacturing-centric states -- Alabama, Pennsylvania, Indiana and Ohio.
States with largest discounts
Average foreclosure sale price
Average % of market value
Alabama
$133,834
59.95
Pennsylvania
110,936
61.68
Indiana
99,255
63.50
Ohio
90,300
64.70
Missouri
144,768
67.25

States with smallest discounts
Average foreclosure sale price
Average % of market value
Hawaii
$657,211
85.41
Washington
288,397
83.68
Virginia
338,912
83.48
Massachusetts
290,835
83.03
California
437,813
83.00

Finally, trends are interesting: Discounts are increasing in Midwestern states and in New Mexico, while decreasing some in Alaska, Iowa and Texas. This may be a sign of strengthening real estate markets in those states -- or weak market values to begin with.

State
Average % of market value
Discount increase (decrease)
Louisiana
74.04
15.88%
New Mexico
72.59
12.01
Minnesota
72.79
10.50
Indiana
73.52
9.82
Alabama
63.50
7.48
Alaska
82.02
(8.03)
Iowa
77.32
(5.34)
Texas
78.75
(4.82)
Kansas
74.03
(4.56)
Hawaii
85.41
(3.47)

These facts will help you know how much to pay -- and to know if foreclosures are right for you in the first place. They may also say something about which way the market in your area is likely to go. Either way, they will help you find the "real" deal.

www.usatoday.foreclosure.com

WHAT A CRAPPY FRIDAY

As I said a few days ago, I was concerned about the overall markets. Today really confirmed that feeling. Even though it was no where near the Black Monday back in 1987, it still hurt emotionally.

There are still ways to protect your portfolio in this market:

1. Sell all stock and move into cash.

2. Sell your losing stocks, hold onto your winners and be partially in cash.

3. Hedge your losses by investing in other investment vehicles.

I am going to highlight one of those other "investment vehicles" right now. I have been watching the foreign exchange a.k.a. Forex. One currency is catching my eye and that is the British Pound. Why? If you click on the chart to the left to enlarge it you will see a couple of things. 1. It appears to be breaking out of a cup with handle formation as it broke past $205.00. 2. There has been a lot of buying of the ETF as seen by the high spikes in black as seen as "trading volume" at the bottom of the chart. 3. There is talk that the US dollar is going to drop in value and this benefits the Pound. I'll bet you are probably now asking, how can I buy currency? Well, you don't have to buy it. You can buy the ETF (exchange traded fund) going by the symbol of FXB which stands for Foreign Exchange British Pound. Yeah, I see the one drawback - it is at $205, but this one is to hedge, or "diversify" your portfolio. I know I am going to be buying the Pound on Monday.

One stock that looks very promising is WBD. I am going to attach a picture and see if you can spot the pattern similar to FXB.

Good luck trading.

JD

For more advanced traders:

Bear Call Spread ARD 70/75, HURC 60/65, OMCL 30/35, SII 70/75, SRCL 55/60, WFT 70/75

SOLD OFF JASO AT $50, BUYING AMZN

Why am I getting out of JASO? I have gained my usual 20% profit and am willing to take that. I'll just leave my reason for selling at that.

I am going to buy AMZN, however. The reason why - it is in oversold territory and near "support" which was the late-July breakout to $89.00. Since that breakout, there has not been a lot of selling and I enjoy buying near support levels. AMZN is also in an industry that has a lot of money flowing into it so that is another reason to buy. If an industry is moving up in price, it usually pulls up the stock too.

Good luck trading.

JD

PERSONAL INFO

Info for me:
38631529 FM, 38623275 FM, 38627642 FM
38628670 FW, 38630224 FW,
57696261
24491775, 24491790
mta.org Mike Carr, CMT (CO)

http://bigmoneyoptions.investorplace.com/about_big_money_options.html

WFRewards: 1221 Orig Name then Mccain4pres
WFRewards busline: 4550 wrpmllc Nobama2008

http://www.forexcalc.com/ forex position calculator
http://www.cboe.com/LearnCenter/OptionCalculator.aspx Options calculator
www.gurufocus.com
www.stockpickr.com
www.themillionairezone.com
http://www.traderslibrary.com/
www.streetinsider.com

Forex transactions
86% invovle USD
37% involve EUR
16% JPY
15% GBP

27% of volume is EUR/USD
13% USD/JPY
12% GBP/USD

The most common pairs traded bases upon volume are: EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD, USD/CAD.
The most common time periods used in forex are 10, 20, 50, 100 and 200 days.

BEST OPTION PLAYS FOR CURRENCIES
ETFs used to match forex pairs:
FXA
FXB
FXC
FXF
FXM

USD index. If you want to USD to rise, buy the UUP which stands for USD UP. If you want to dollar to decline, BUY the UDN which stands for USD DowN.
DBV

Other ETFs
QID - the inverse fund of the Nasdaq.
SH, SDS - inverse of the SP-500.
DOG, DXD - inverse of the DJ-30.
TWM - 2x inverse of the Russell 2000.
MYY, MVV - inverse of the MidCap 400.
INP - India
FXI - China
EWZ - Brazil
EWM - Malaysia
EWW - Mexico
EWT - Taiwan
ILF - Latin American
FXP - Ultra short China
EEV - Ultra short Emerging Markets
EWV - Ultrashort Japan
GLD - Gold
OIL - Oil
SLV - Silver

13F Filing
Warren Buffet
Carl Icahn
Kirk Kerkorian
Eddie Lampert
George Soros

Strategies:

A system:
ADX cross D- => Calendar spread using ATM call with greater than one year expiration for long, and ATM call with near month expiration for short.

MH system:
MACD Histo crosses above zero line => buy up to $0.10 above that day's close. Goal is 5% profit.
MACD Histo crosses below zero line => short down to $0.10 below that day's close. Goal is aldo 5%.

Oops Trade:

If the market opens below the previous day's close, buy at yesterday's low. If the market opens above yesterday's high, sell at yesterday's high.

5/20/50 system:
Buy when 5 DEMA crosses above 20 DEMA, if both are above 50 DEMA. Goal is 5%.
Short when 5 DEMA crosses below 20 DEMA, if both are below 50 DEMA. Goal is 5%.

0.5/-0.5 MH OPTIONS SYSTEM:
Buy call when stock closes above -0.5 after being below it within the past 5 days.
Buy put/sell covered call when stock crosses below 0.5 within the past 5 days.

See 9/22/07 posting.



Moving Average Crossovers in Forex
The key to use moving average crossovers is to first identify the trend of the market and then to only trade in that same direction. If you find a strong uptrend, then using a moving average crossover as a buy signal has more value. If you find a strong downtrend, then using a moving average crossover as a sell signal also has more value. Since moving averages can help identify the trend of the market, we can develop a simple trading approach using three different moving averages. Use the 200 day exponential moving average (EMA) for long term trend determination. When the market is above this moving average we can consider the trend as up and only take the buys. When the market is below this moving average, we can consider the trend as down and only take the sells. We are also using a 3 day exponential moving average and a 7 day simple moving average. When the 3 dayEMA crosses above the 7-day EMA and the price is above the 200 day EMA, a buy signal is given. A sell signal is given when the pair is below its 200 day SMA and the 3 day EMA crosses below the 7 day EMA. Buy first contract 10 pips to the opposite side of the trade of the close (if there is a buy signal, buy 10 pips below the close of the prior day) Buy a second lot at the current price of the 7 day EMA. If there is a sell signal, sell 10 pips higher than the prior days close for the first contract. Then set a second lot at the current 7 day EMA price. Set a stop loss at 10 pips ABOVE/BELOW the previous 3 day high.

Then, 7 days after the entry, start setting the first stop loss at the 10 day EMA. Take 1/2 of the number of lots bought. Use this as a trend line determination and extend the line out to take profits when this trend line is violated again.

Here are the exact steps

1. Search Metastock in forex pairs for 3/7/200 cross. There is probably only 1 trade every 3 months per pair.

2. Set buy/sell limit at 10 pips below/above the previous day's close. Set second lot at the 7 day MA of the previous day that is good for 3 days.

3. Set stop loss at 10 pips below/above the low/high of the previous three days.

4. Set first target at 100 pips. Set second target (buy stop/sell stop) at previous 3 day low/high.

Simple Forex Strategy

Strategy requirements:Time frame: 1 dayIndicators: 5 EMA, 12 EMA, RSI 21 Currency: ANY
Entry rules: Buy when 5 EMA crosses up and over 12 EMA and RSI is above 50. Sell when 5 EMA crosses down and below 12 EMA and RSI is below 50.
Exit rules: exit when 5 and 12 EMA cross again or when RSI crosses back through 50.

SHORT TERM FX STRATEGY:

Daily Stoch is moving up - move to hourly chart and buy when moves out of Oversold area and sell when crosses back down out of Overbought area. The reverse is true too.

Long Term Strategy: Use Slow Stochastic on weekly indices to determine trend. Use trend lines on weekly to determine up or down trend. If stoch is up on weekly, look for DAILY stoch cross-up. If WEEKLY stoch is down, look for DAILY cross down on stoch.

3 DAY STRATEGY: Determine trend by looking at pair in comparison to 200 day MA. If pair is ABOVE 200 day MA, then BUY when the high from the previous 3 days has been breeched to the upside. Set a sell limit at 100 pips above this price for one contract and a sell stop at the low of the past 3 days. Each day move the stop loss up to the lowest low of the past 3 days.

If the pair is below the 200 day MA, SHORT when the low of the previous 3 days has been breeched to the downside. One the first contract, set a buy limit at 100 pips then set a buy stop at the highest high of the past 3 days. Move the buy stop down every day to the highest high in the past 3 days.

TAKING 50% OF MY JASO SHARES OFF THE TABLE

I am not liking the feel of the market and these past few days have seen bouts of selling (also look at DJIA at http://www.stockcharts.com/ and you will see that the MACD has crossed down which means it is a sell signal.) I have gained a target of 20% on JASO and I should take all of my JASO off the counter based upon my rules of stock trading. However, JASO ran up 20% in less than 3 weeks from my proper buy point. This means that I should hold onto the stock for at least 8 weeks. So, I am going to take a 20% profit on 50% of my JASO stock and let the other 50% run for at least 8 more weeks. Let's see if I have the fortitude to do just that.

As for the model portfolio, here is the latest picture as of 10/16/2007. The picture below it is from 9/20/2007. Yes, it still continues to rise.

Good luck trading.

JD

DSX SOLD OUT AT 20% GAIN AND JASO FINALLY CONTINUES TO MOVE UP

DSX hit my 20% sell rule on Thursday when it surpassed $35.00 so I took my 20% gain off the table. I know that my rules say to hold onto a stock for at least 8 weeks if it rises more than 20% in a 3 week span, but I had to leave town and I placed an order called a SELL LIMIT order. Basically what that order says is to SELL my stock then it hits a LIMIT. Use this example: You are in a car entering a highway at 50 mph. Putting your foot on the gas you accelerate. But when you accelerate to your goal of 80 mph, your car shuts the engine off and you immediately find yourself at your destination. You won! Same same with the stock - once your stock accelerates to a certain dollar amount, the stock is sold and profits are secured. I bought DSX at $29.10 and $29.60. I set my 20% target at $35 by placing a SELL LIMIT ORDER and walk away from the computer knowing that if the $35 target is hit, I have made my 20%. In my instance, I go to Las Vegas, win $2K playing craps, come back home, look to see I am at my destination - a 20% profit on DSX. Won at Vegas and in my stocks!!!

I was finally happy to see JASO took off too. Let's see how far this one can go.

So I was running back through my old trades and was checking out MR. I bought MR near $37.90 and my 20% target was $44.85. If you look at the attached chart, you will see that the stock topped out at $45.19 and has turned tail back down to near my original purchase price. This of course is the optimal set up where I got out near the top. Does this happen all the time? No, but more often than not this situation occurs. Notice on the chart however that the 50 day moving average (blue line) is acting as "support" and may allow the stock to take back off to the upside.

OMCL was sold out near $28 and it rose to $31. It is back down to near the original point where I took my 20% profit. I would wait until this stock retraced a little bit more closer to its 50 day moving average before considering buying it again.

Good luck trading.

JD

ACTU IS LOOKING PRETTY BUT ONLY IF YOU WANT TO TRADE LOW PRICED STOCKS

ACTU at $7.25 looks mighty nice, but remember that lower priced stocks are usually not as strong as higher priced stocks.

JASO is also bothering me. It broke out really well, but there appears to be a lot of selling going on as seen by the high trading volume on down days. That does not bode well for the stock. The solar industry group has not done well here lately and JASO is feeling the effects of that. I may be bailing on this one soon if it doesn't make any headway.

ADDING SOME STOCKS TO THE BUY LIST AND SHORT LIST

Since buying more JASO stock yesterday, the stock is up 5% today. Not bad for a day's work. DSX is also up 5% from where I purchased it, too.

For those of you new to investing, you should create a "BUY" list which are stocks that you are willing to buy when the opportunity arises. As you become more adept at buying stocks, you can create a "SHORT" list which means you borrow a stock from a broker, then go to the market and sell it, aka "short" it, and hope to buy it back at a later date for a cheaper price. It is an extremely difficult concept to grasp so it is not for the novice investor.

I am going to add some stocks to my buy list:
VMW, TRAK, SID, TISI, LGTY, EXLS, LIMC

Short list:
JCG, UPM, BHE, NTRI

Good luck trading.
JD

Updated buy list
AAPL, ACH, ARD, BAP, BHP, BIDU, BOOM, CAE, CAM, CLB, CMED, CRNT, DECK, DRYS, DSX, EDU, ELP, ESV, EXLS, FLIR, FMCN, FSRV, FSTR, FTI, FTK, GRMN, GSF, GSOL, HAL, HURC, HURN, ICE, IEX, ISRG, KMGB, LAYN, LGTY, LIMC, MICC, NILE, NOV, NVDA, NVEC, NVT, OMCL, OYOG, PCLN, PCR, PDE, RDC, RIG, RIMM, RIO, SID, SII, SQM, SRCL, TBSI, TISI, TNH, TRAK, TWIN, VDSI, VIP, VMI, VMW, VSEA, VSEC, WBD, WFT, WOOF, WHQ

SHORT LIST:
ABK, AEPI, AHM, AIV, ALX, ARE, AVB, AXR, BHE, BIO, BONT, BSC, BXP, CAC, CAKE, CHKE, CPKI, CT, DSL, ESE, FACE, FED, GHL, IGT, INSU, ITMN, JCG, KB, LEAP, LPNT, LXK, MBI, MBWM, MKL, MSTR, MTB, MWRK, NTRI, NVR, PJC, PFB, PMI, PSA, PVTB, RAS, RCII, RWT, SEPR, SHLD, SHLM, SLG, STU, UCBI, VNO, UPM, VTAL, WSC, WY

DITCHED AIRM AND BOUGHT MORE DSX AND JASO

AIRM is very well overextended and I expect the $50 mark to be a fair amount of resistance for the stock so I took my profits of AIRM at $50.47 giving me a nice 17% return.

I then took that money and bought more JASO and DSX shares today. Why would I add more shares? Click on the chart to the left and see that JASO has retraced back to near the original buy point of $40.75. The yellow arrows at the bottom of the screen show the high trading volume days and these show good signs of buying. Since trading volume has not picked up higher than those two days, this retracement in price is OK.

Same situation with DSX. Again, click on the chart to find out why. DSX was bought between $29.10 and $29.60.

Also noticed that BLUD had an excellent day today by rising 10%. That is one that fueled my overall portfolio today.

Good luck trading.

JD

DSX BOUGHT AT $30.10

I was able to buy DSX today at $30.10 which is 1.1% above my proper buy point. Let's continue to watch what will happen with the stock.

MR AND OMCL HIT 20% RULE

MR and OMCL HAVE made a good run and both gave up their 20% so I am now out of MR and OMCL.. What is the 20% rule? If a stock runs up 20%, it is time to get out. Search "trading rules" in this blog to find out what my rules are.

I am looking at stocks to buy into now that MR and OMCL are out of the portfolio. DSX looks hot to me. I would peg $29.78 as the proper buy point. The maximum price I will pay is $31.26. It was a short 9 week cup and I believe it is putting out a "high handle."

As for the model portfolio that had $20K in it in June, 2007, MR was taken out and NBG was added at @ $12.89. It still holds JASO in it, but I am not too confident in its recent movement. My confidence is overshadowed by the fact that JASO still has potential upward movement despite its recent downturn. The recent downturn is partially due to the falling trading volume. Price movement down with declining trading volume is an OK sign. When trading volume rises and price drops dramatically, that is a warning signal to get out.

Good luck trading.

JD

BITCHING ABOUT BARAK

Normally I do not use this blog for rants/opionins, but I have to today. The reason why I took over my own retirement accounts to trade on my own is that I am a non-believer in financial advisors. Maybe it is a narcissistic view on my part, but I know I can do better than him/her since I am in control of my own destiny. Also, watching the disaster after Hurricane Katrina opened my eyes to make me realize that our federal government is not able to protect me in time of need. I need to protect my family. The feeling of entitlement in the US of A is going to be its ultimate demise. Truly, I wish others understood that the government doesn't owe you one thing other than to defend our sovereign rights and our borders. Since the government is failing that too, I believe we are in a death spiral.

More reason to add weight to a plummeting plane - Barak Obama thinks he can save Social Security by eliminating the earnings cap on Social Security. Currently, the maximum any person pays into SS is $97,500 based upon their income and he wants to eliminate the cap completely. In essence, this is fleecing the high income earners since they are the ones who will be most affected. As seen in the op-ed by Investor's Business Daily "Social Security willl have an unfunded liability over the next 75 years of more than $27 TRILLION in 2003 dollars." This is just another HIDDEN TAX INCREASE. Why do I say it is hidden? It is not seen as an increase in our income tax rate, but is hidden into the taxes that are already paid, but capped.

Businesses will be hit hard as they already pay both the EMPLOYEE and EMPLOYER PAYROLL TAXES. If a business has to pay both, the business will have to eliminate employees to continue to make a profit. Unemployment goes up, entitlements increase and recession sets in. Butthead Barak also fails to recognize that eliminating this cap will increases taxes for "97,065 carpenters, 110,908 police officers, 254,992 nurses, 208,562 teachers and 237,000 dentists."

My opinion, PRIVATIZE SOCIAL SECURITY. So far the federal government has used the funds in SS to pay for Medicare costs in the form of IOUs. Well, those IOUs are going to be called in mid 2010s.

You want to save SS, Barak? Don't allow illegal aliens SS. Don't allow their family members who still live outside of the US to receive SS benefits. Teach people to "fish" rather than giving them their "fish for the day." Don't continue to tell them that the federal goverment has the obligation to provide for them.

I believe in capitalism and my wealth should not be taken by the federal government to be distributed to people who believe the government owes them something. That is communism. If the government takes away my money to distribute amongst them, why should I continue to work hard for the same reward of someone who sits on their butt and collects the $$$ that I put into SS. My reward for working 60 to 80 hour work weeks is a 6 digit income so get your f*%*&*%$ hands out of my pockets, Barak!!!!

LET'S GO INTERNATIONAL AND "DIVERSIFY"

My trading rules state only 5 stocks should be in my portfolio if I have between $250K and $1 million (See September 14th blog). Well, all the stocks that I have money in are well overextended and not in a buy territory and I still have money sitting idle in cash. Since the overall market is in a rally, I need to be 100% in the stock market and 0% in cash. So I pared off some of my OMCL and used up my cash to buy NBG. Below is the reason why.


In scouting for stocks that are breaking out, I cam across NBG which is just out of a cup and handle. (click on this to read about the chart pattern) The proper buy point is $12.89 thus making the maximum buy point $13.53.

Here are my purchases:

NBG BOUGHT 3900 @ $12.91 ($50,356.00)NBG BOUGHT 1000 @ $12.93 ($12,937.00)
NBG BOUGHT 1100 @ $12.9199 ($14,211.89)
NBG BOUGHT 100 @ $12.9199 ($1,298.99)
NBG BOUGHT 2800 @ $12.91 ($36,155.00)

Here is my OMCL transaction:

OMNICELL COM INC (OMCL) BOUGHT 700 @ $23.4253 ($16,397.73)
OMNICELL COM INC (OMCL) BOUGHT 1,000 @ $23.5829 ($23,582.93)

OMCL SOLD 700 @ $27.95 $19,565.00
OMCL SOLD 500 @ $27.9801 $13,982.83
OMCL SOLD 500 @ $28.0001 $13,992.83

Also, here is the graph of the portfolio that I am following. Again, the picture comes from the Scottrade account that I am managing. Account balance as of 06/01/2007 was $20,000. Currently it sits as $44,331, a 122% increase. The only stocks being held in it now are JASO and MR.



GOOD LUCK TRADING.
JD

FOREX AND EQUITY TRADING SYSTEM / STRATEGIES

Hope you forgive me on this one. I am basically making this as a "journal entry" on this blog and their is a lot of code on my part. For those of you who don't trade as of yet, I would just pass on this submission and move on to the one below.

System 1: 7/20/50 Cross Rules

BUY: when 7 day EMA crosses over 20 day EMA if both are above 50 day EMA

SELL: when 7 day EMA crosses below 20 day EMA if both are below 50 day EMA.

Goal is 5% profit

System 2: ADX(14) Crosses PDI/MDI

BUY: Buy when ADX(14) crosses MDI(14) and ADX<30

SELL: Sell when ADX(14) crosses PDI(14) and ADX<30

Goal is 20% profit or if 20% gain in 3 weeks, hold for at least 8 weeks

System 3: MACD Histo

BUY: MACD Histo crosses ABOVE zero and equity is ABOVE 30 day EMA.

SELL: MACD Histo crosses BELOW zero and equity is BELOW 30 day EMA.

Goal is only 5%

System 4: Cross PDI/MDI and 3 day WMA & 22 day EMA

BUY: Cross PDI/MDI and 3 day WMA > 22 day EMA

SELL: Cross mDI/pDI and 3 day WMA <>

Goal is 10%

System I haven't tested yet:

ADX + MACD HISTO (Trending)

GOAL - capture 40 to 100 pip moves in forex, or 5% in equities
Stop loss is latest low for forex and 10 day EMA for equities
ADX14 cross MDI/PDI and MACD HISTO >0/<0 = go long/go short
Best time frame is 4 hour or daily.
Some modify to ADX9.



Here is a different example of a trading system / strategy:
Buy when: Fx pair is ABOVE 30 day EMA and MACD Histo crosses above zero.
Sell when: Fx pair is BELOW 30 day EMA and MACD Histo crosses below zero.

(MACD Histo settings are 8,17,9)

Goal is 50 to 100 pips.

THANK YOU JASO!!!

I was able to jump in and buy shares of JASO. Boy, I expected the stock to retrace for a little while and not make such a move on Friday. The reason why I have a huge grin on my face is that it was a 13.58% move in one day from the $40.27 price. Here are the transactions:

9/21/2007 JASO BOUGHT 100 SHARES OF JASO AT $40.27 ($4,034.00)
9/21/2007 JASO BOUGHT 200 SHARES OF JASO AT $40.27 ($8,061.00)
9/21/2007 JASO BOUGHT 800 SHARES OF JASO AT $40.27 ($32,223.00)
9/21/2007 JASO BOUGHT 500 SHARES OF JASO AT $40.27 ($20,142.00)
9/21/2007 JASO BOUGHT 300 SHARES OF JASO AT $42.38 ($12,714.00)
9/21/2007 JASO BOUGHT 200 SHARES OF JASO AT $42.38 ($8,483.00)

Since I bought JASO, I am not considering buying CNH based upon my rules of limiting the number of stocks I can own. I have updated the Yahoo! toolbar on the right to show which stocks are in my portfolios.

GOOD LUCK TRADING.
JD

Info for me:
38631529 FM, 38623275 FM, 38627642 FM, 38628670 FW, 38630224 FW, 57692517, 24491787, 24491775, 24491790, fx 10060819, invs669671, D3575312001/7407