Financial Solution News

I’ve spent some time this morning trying to find a new trade, but can’t zero in on anything that seems like a good move. I went back to this week’s Barron’s and saw that even the strategists they polled can’t come up with a good consensus of what’s hot and what’s not.

Six of them say to avoid Consumer Discretionary stocks and three say they favor the same sector.
Four say to avoid Financials and two favor Financials.
None of them says to avoid Tech, but a few like it and that’s one I’m not sure of based on that $COMP chart I drew this past weekend.

Here’s the Barron’s article for those interested in seeing the table.
Once I think I am getting close this market throws me a curveball like on JOYG.?? JOYG beat earnings and forcast a good future, but is down 7% today and was down more.?? I can only assume […]

Original post by Alex Fotopoulos

I charted the??NASDAQ NMS Composite Index ($COMP) for the past year’s daily price action ending August 29th, 2008.?? At a glance this chart could look like it’s leaning bullish, but when you zero in on some details that bull might not be a good buy.

At a glance you could see that the Naz broke the downward trend line of lower highs, but when you look closer you see that break was only intraday and could not have a repeat close higher.??
At a glance you could see a nice uptrend of higher lows started in July, but when you look closer you see that trend already broke when it hit that line slightly above 2400 that has come into play more than a few times this year.
At a glance you can see that the $COMP is above its 50 day moving average, but when you look closer you see that it […]

Original post by Alex Fotopoulos

My Sunday series of index charts continues today with the S&P 500 ($SPX).  This time I took a shorter view and only went back three months to see a daily view of the price changes.  The SPX is getting to an interesting place in its trend line movement.  The longer term downward trend of lower highs is coming to a point soon with the upward trend of higher lows.  One of the trend lines of higher lows broke last week, but then recovered.  The S&P 500 even rallied above the 10, 20 and 50 day moving averages for a strong finish to the week.
With the close on Friday finishing near the trend line of lower highs, I expect a (maybe brief) pullback to lower trend line of higher lows.  As volatile as this market has been, I don’t expect those lines to hold more than another week.  If they did, […]

Original post by Alex Fotopoulos

I charted the DJIA (previously $INDU) again today.  I was actually surprised to see the chart show it looks like we have some bullish room to run still.  The latest trading channel shows the DJIA is near its trend line of higher lows.  12,000 is the big question mark for this chart.  It was a floor for the Dow in the first quarter of this year and then was a speed bump on the way down in June.  Now we get to see if it will stop the current upswing.  As luck would have it, the trading channel I mentioned at first shows that the trend line of higher highs could coincide with 12,000 and give it a double reason to take a break.  The question will be if the trading channel holds the power to get through of if 12,000 is too tough to pass.
You can see a change […]

Original post by Alex Fotopoulos

I bought 100 shares of USO (an oil ETF) at $99.00 and sold a September 98 covered call for $6.80 in my IRA a little more than two weeks ago.   I’ve watched the price of oil fall fairly steadily since then.  Around the same time I entered a limit order to sell a naked put on the same ETF if/when it dropped further.  This morning while USO was trading at $90.54 I sold one USO September 90 naked put (UNAUL) and received $499.25 after commissions. 
West Texas Intermediate (WTI) Crude Futures were trading around $112 at the time.  Some analysts think WTI could drop as low as $90-100.  If that’s the case I’ll be assigned the 100 shares of USO and will sell covered calls on it, hopefully at the same strike while I wait for a rebound.  Had I not been sleeping at the wheel I probably would’ve lowered my strike some on this order, […]

Original post by Alex Fotopoulos

I was able to check the market yesterday before we walked down to the beach and again after closing.  I had a couple of trades while away for two days.  The first was a limit order I entered a few days earlier on VIP naked calls.  While VIP was trading somewhere near $25.40 on Monday morning my limit order hit and I sold four VIP September 25 naked calls (VIQIE) and received $987.00 after commissions.  That was the high trade of the day for that strike.  VIP cut its gains before lunchtime and I had a quick profit. 
If only the picture was really that pretty.  I’m long 200 shares of VIP that with August 30 covered calls on those shares.  I also have 200 shares I’ll be assigned in a few days from two August 30 naked puts I sold a while ago.  While I called these latest call options “naked”, […]

Original post by Alex Fotopoulos

I charted USO this morning to get an idea of where the price of oil might find support.  Don’t get too excited when you see these numbers, USO and the price of oil are not equal and do not move dollar for dollar.
USO is down more than 20% from its high, making it a technical bear market for oil now.  How quickly the tides turn.  (I’m leaving for the beach in two hours, so I had to figure out a way to mention the tides.)  The 90 range was somewhat of a ceiling and then a floor in March and April.  USO is edging closer to it now and could hold support.  What could help that range offer support is the year long trend line of higher lows that started last August and touched again in January and February.  The longer trend lines tend to have more “power” for support […]

Original post by Alex Fotopoulos

I made two trades yesterday (Friday).  I started with Burlington Northern (BNI) from a limit order I had from a day earlier.  While BNI was trading at $102.63 I sold one BNI September 95 naked put (BNIUS) and received $259.25 after commissions.  I’m already long 100 shares of BNI from the July 105 naked put assigned to me.  Since I sold a covered call at the September 95 strike more than a week ago, BNI has rallied.  I guess I’m having a little seller’s remorse and decided that BNI is still a good play.  Selling the naked put at the same strike as my covered call, making this a straddle, guarantees me to have made the correct decision on one of the trades.  If BNI does dip back below 95 before options expire in September I’ll have 200 shares of a good dividend paying stock that Warren Buffet considers worth owning […]

Original post by Alex Fotopoulos

I’m glad to be done with July.  I finished the month with a realized gain of $595.96, but have a pile of paper losses waiting for a rebound or to be realized when I close my positions.  On paper, I lost $4,434.45, but the bright side of that is that I was down around $7,000 briefly.  I’m heading in the right direction again, finally.  I’m still doing better than all the major indexes for the past year except for the S&P Midcap 400.  I have a lot of time value that is available to deteriorate and expect a good August.
My current account value according to Quicken is $95,973.14.14 and according to TD Ameritrade is $96,348.21.  I’m planning to skip making a deposit in August since I sent in double my normal deposit in July.  I did that for no other reason than I wanted to hit $100,000 by my July 6th birthday.  I came within $500 and […]

Original post by Alex Fotopoulos

ETN was down more than $10 this morning.  That’s over 13% down from yesterday’s close.  I planned to wait until after Friday’s options expiration to sell calls on it, but decided I had to cut my losses sooner rather than delay it.   
While Eaton (ETN) was trading at $69.28, I sold one ETN July 70 call (ETNGN) and received $159.25 after commissions.  ETN came off its low of $68.75 soon after I made my trade.  I could’ve made another $100+ if I waited 15-30 minutes. 
I originally sold a July 90 naked put (ETNSR) and received $219.25, so this gives me $378.50 to cut into the $2000 I’ll lose on the stock if ETN closes above $70 when options expire on Friday, three days from now.  Losing more than $1600 is pretty bad, but I’d rather have that loss wrapped up than have my losses get bigger.  If ETN does stay below $70 at the end of Friday, I’ll […]

Original post by Alex Fotopoulos