The Stock Market

[DarterBlue]

The Whipsaw Song: If my exit from my longs proves premature, in the spirit of humor, I will repeat a post I made nearly two years ago. Performance by one of the greatest traders of all time.

 

[DarterBlue]

After opening with significant losses, stocks reversed higher and closed at or near day highs depending on the index in question. This represents a positive reversal day off significant day lows and can be seen as bullish. On the other hand, two flies in the ointment were present. First, volume on the selloff was significantly higher than comparable volume the prior day; on the other hand, volume on the subsequent rebound was lacking and at the close total volume on the day was lower on both exchanges than Wednesday’s volume. Second, the rally was led by the lagging DOW and not the leading NASDAQ indices. A third, less significant factor, was the lack of breadth as at the close, advancing stocks only led by margins of 8-7 on the NYSE while on the NASDAQ a there were a mere 10 issues difference between the number of stocks up and the number down. With that said, you have to respect the reversal. Where do I think we go from here? At this stage, I would say there is no clear answer to this. However, the next two trading days should provide one. So, for now, I will remain on the sidelines having liquidated all my positions today.

 On the day, I closed out all my positions mid-morning for a loss on the day of $2,565.41. Netting this loss from my prior unrealized gains netted me a gain of $19,481.68 from my venture into the market on April 7. Expressed as a percentage of funds at risk over the period, it is an approximate gain of just under 9%. All the positions I held closed above their sales prices. At the time I sold 4 of the 5 were down on the day. At the close, 4 of the 5 were up. By my calculation, the loss of $2,565.41 would have been a gain of just over $4,000 on the day, had I held into the close. With that said, at the very least, I did not get the best prices available on my exit. With that said, how do I feel about exiting? At this stage, the jury is out. The market staged a powerful rebound from day lows. however, as described in the prior paragraph, the rebound had a few question marks. For now, I think I will evaluate my decision at least through tomorrow. Based on Friday’s action, I will decide whether to: stay on the sidelines, reenter the market on the long side, or go short. Note that JD, which was one of the stocks I owned reports before the bell tomorrow. Given the shaky nature of the market, I would probably have sold at least that one even if I had persevered with the other four positions, as when the market is acting suspect, you don’t want to be blindsided by a negative earnings surprise.

[imaGoodBoyNow]

In other news I’m learning what these graphs mean

 

 

#BeginnerLife 

 

and second I’m debating on buying 10 stocks of 

[DarterBlue]

1 hour ago, imaGoodBoyNow said:

In other news I’m learning what these graphs mean

 

 

#BeginnerLife 

 

and second I’m debating on buying 10 stocks of 

As long as you stick with Japan and not China, I suppose Prez will have no beef with you. 

[imaGoodBoyNow]

19 minutes ago, DarterBlue said:

As long as you stick with Japan and not China, I suppose Prez will have no beef with you. 

I have no ill towards that guy, as long as the douche keeps sending me Stimulus capital checks for my portfolio, the guy can do no wrong

[DarterBlue]

Thoughts on Reentry: Should I decide that being on the sidelines is not the correct place to be, the question begs itself: What should be my vehicles of choice? For the most current go around, I chose to buy individual securities. The thinking behind this is, I am a good stock picker and I have some time on my hands. Well, now that I am flat, if I decide to go long or short over the next few days, what vehicles should I use? Should I go long or short individual stocks or indices? Or should I buy calls if I think the market has further upside or puts, if I think we put the top in this week? At this juncture, I think options are the way to go. Why? If I go short, I almost always use options now. Bear markets tend to be relatively short, very volatile affairs, but have huge counter trend rallies. I feel I can get very good upside while strictly limiting my risk using options instead of trading the underlying securities. Regarding using options if I decide to reestablish long positions here, given I feel that at least half the current move has been made from a time perspective, in order to give myself good upside potential while keeping risk relatively low if I am wrong, options appear the superior choice to individual stocks. I will preface this by saying that I may reenter one or two of the long positions I closed today depending on their action over the next two to three days. 

[DarterBlue]

7 minutes ago, imaGoodBoyNow said:

I have no ill towards that guy, as long as the douche keeps sending me Stimulus capital checks for my portfolio, the guy can do no wrong

On a serious note, although I have looked at candlesticks, I have never used them in my trading. My chart use for decision purposes has been to stick to the tried and true: logarithmic, bar charts. This does not mean that I am panning the idea as I feel they can be useful and provide certain insights that the tried and true don't. But you know the old saying, "You can't teach an old dog new tricks."

[thc6795]

Tic Tic. First The FBI talked with Barr. Today it was Fienstien and her husband. I think a couple of theses crooks are finally going to get caught. Insider trading for sure. What else Darter? Do you think anything will come of this?

[DarterBlue]

15 minutes ago, thc6795 said:

Tic Tic. First The FBI talked with Barr. Today it was Fienstien and her husband. I think a couple of theses crooks are finally going to get caught. Insider trading for sure. What else Darter? Do you think anything will come of this?

I don't pay attention to that kind of news in the methodology I use to trade the markets. Personally, I don't think most news directly affects what I do. What I do care about to a degree, is how the market reacts to news, not the news itself. 

[DarterBlue]

A Deeper Dive: So, last night, I took a closer look at the stocks that led yesterday's reversal rally to the upside. I commented last evening that it was impressive in terms of price, but had serious caveats. Well, a deeper dive revealed that the stocks that led the rally were largely concentrated in beaten down sectors such as: banks, airlines, oils, etc. To be clear, not all of these sectors will show up on the largest daily percentage gains list; however, they all sold off mightily early, many making lower lows than at the market bottom in late March and then rallied furiously thereafter. In short, yesterday's rally was fueled by the cats and dogs of the current uptrend. What does this portend? Unfortunately for those who are long, I believe it is more likely than not that this latest rally attempt will be short lived. A look at the charts of the major indices excepting the two NASDAQ indices, also look suspect. They show clear signs of topping out. 

With the above in mind, I may go short today or Monday depending on market action. My vehicles will be put options with August expiration on two or three of the major indices. Once I make up my mind, I will advise accordingly. 

 

[DarterBlue]

1 hour ago, DarterBlue said:

With the above in mind, I may go short today or Monday depending on market action. My vehicles will be put options with August expiration on two or three of the major indices. Once I make up my mind, I will advise accordingly. 

After careful deliberation, I have decided to commit approximately $25,000 to put options. The game plan is to buy 15 put contracts on the Russell 2000, strike 116, August expiration and 10 put contracts on the Dow Jones Industrial Average, strike 229, August expiration. The puts are actually on the related ETF. I will place limit orders to keep the commitment not far north of $25k. I am not going to force the trade, as my commitment to it is not overwhelming. In keeping with this sentiment, I am keeping the commitment relatively small.

Options tend to be all or nothing propositions. However, by buying August expiration, this is somewhat mitigated, as unless there is a huge move against me, there will be some real time value embedded in the price for the next 45 days. I will cover the positions on or before the loss reaches 50% of the commitment. In terms of profit objective, I would like to make at least 50%; however, I will let the market's action be the ultimate determinant. 

[DarterBlue]

1 hour ago, DarterBlue said:

After careful deliberation, I have decided to commit approximately $25,000 to put options. The game plan is to buy 15 put contracts on the Russell 2000, strike 116, August expiration and 10 put contracts on the Dow Jones Industrial Average, strike 229, August expiration. The puts are actually on the related ETF. I will place limit orders to keep the commitment not far north of $25k. I am not going to force the trade, as my commitment to it is not overwhelming. In keeping with this sentiment, I am keeping the commitment relatively small.

Both orders filled. Outlay $24,846.55. We will see whether this was smart or not. 

[DarterBlue]

After opening broadly and significantly lower, stocks, for the second day in a row, reversed to close broadly higher and at or near day highs on mixed volume (NYSE volume was lower and NASDAQ higher). The range today showed modest gains of from .18% on the NYSE to 1.57% on the Russell 2000. However, given the lower open and reversal higher, it was a fairly impressive day. Techs were mixed which was also pretty good, given the semiconductors were broadly lower. The semis are a big component of tech. On the day, advancing stocks led by a meager 17-13 margin on the NYSE but by a more impressive 5-3 margin on the NASDAQ. What is my take on today’s action? The averages, after suffering big losses Tuesday and Wednesday, clearly want to make a stand. Will they be successful? The jury is out, but they are certainly making a very strong effort as institutional money has clearly provided a good measure of support at these levels.

 On a personal note I went long put options on the Russell 2000 and Dow, ETFs today. Needless to say, they are off to an inauspicious start as I am down $1,454 at today’s close. To rub salt into an open wound, four of the five positions I sold Thursday, were up and three of the four by margins of 3% or more. The only one that closed down lost a negligible amount. So, I clearly left money on the table liquidating these positions. I estimate I would have been up over $5k on them today to add to the over $6k left on the table yesterday. To trade successfully, you have to be thick skinned. For you will be confronted by your errors many, many times. The trick is to realize that you will always make errors. No one can forecast the future with divine precision. Once you accept that, then you need to recognize when you make a trading mistake and fix it before it destroys you emotionally and financially. This leads me to the question: At a minimum, my purchase of the puts was not timed properly, should I liquidate them on Monday? The answer is not yet; however, I need to have them on a short leash. If the market gives clear signals that it intends to recover from the recent bump and continue higher early next week, then on Monday or Tuesday, I will cover the puts, take my losses on them and go long the market. This time, I will probably not use individual stocks but will buy calls on the indices. Why? Because, even if we continued the upward trend from here, I think it’s on borrowed time. Thus, by using calls, I can manage my risk more effectively (smaller positions), while profiting quickly from the leverage the options provide.

[imaGoodBoyNow]

On 5/11/2020 at 12:29 PM, DarterBlue said:

So, if you still own the stock, you are going to lose your old shares which will be replaced with new shares. in a ratio of 1 for 12. For example, if you owned 36 shares of the old stock, you will get 36/12 = 3 shares of the new stock. Also, they may end up screwing you as in the the number of shares you own are not perfectly divisible by 12, any fractional shares that are less than a 1/2 share will magically disappear.

Reverse stock splits are a desperate move by companies whose stock has been beaten down, to attract investors. Many institutions can't buy penny stocks (prohibited by their operating rules). By doing the reverse stock split, the hope is that the new stock will trade at 12X the old stock price. 

Reverse splits usually don't work out well for either investors or the companies that do them.

Hope that helped. 

 

On 5/11/2020 at 12:31 PM, Troll said:

That's what they do usually when the price drops so low they risk being junk....

....as in 'not generally' good news for you.

but  have not been following your stock.

means for every 12 shares you own, after that date, you only own 1........theoretically if your 12 shares were worth $1 each then 'supposedly your new 1 share should be worth $12'........

as most don't see it that way, as it's usually a sign of trouble.

😐 😐 so I sold my stocks and ACB stock went up %70 this morning lol 😂 fuck me right 

[DarterBlue]

24 minutes ago, imaGoodBoyNow said:

 

😐 😐 so I sold my stocks and ACB stock went up %70 this morning lol 😂 fuck me right 

In this game, nothing is certain. If you read my posts over the past two days, I fucked up big time, too. And, I have been doing this for 31 years which is probably (maybe) longer than you have been alive. It is all about odds. What are the odds x happens given y. But while you may be able to quantify these odds, it does not mean you win; at least not all of the time. To survive in this game, you have to accept you will make a ton of mistakes. The trick is to not make the mistakes destroy your confidence and to learn from them when there is a lesson to be learned. 

[imaGoodBoyNow]

1 minute ago, DarterBlue said:

In this game, nothing is certain. If you read my posts over the past two days, I fucked up big time, too. And, I have been doing this for 31 years which is probably (maybe) longer than you have been alive. It is all about odds. What are the odds x happens given y. But while you may be able to quantify these odds, it does not mean you win; at least not all of the time. To survive in this game, you have to accept you will make a ton of mistakes. The trick is to not make the mistakes destroy your confidence and to learn from them when there is a lesson to be learned. 

That’s what I’m saying, I’m so new at this, so every single thing I do is a learning experience 

[golfaddict1]

ACB was forced to do a reverse stock split in order to not be de-listed from the NYSE (trading at below 1 dollar for an extended period).

An oil stock I own a small position in ( LPI )will be doing a reverse stock split on or around June 1 for the same reason.  However, in the last month it is gone up 84 pct, but has recently given some back.  

 

 

 

[DarterBlue]

1 hour ago, imaGoodBoyNow said:

That’s what I’m saying, I’m so new at this, so every single thing I do is a learning experience 

 

1 hour ago, golfaddict1 said:

ACB was forced to do a reverse stock split in order to not be de-listed from the NYSE (trading at below 1 dollar for an extended period).

An oil stock I own a small position in ( LPI )will be doing a reverse stock split on or around June 1 for the same reason.  However, in the last month it is gone up 84 pct, but has recently given some back.  

 

 

 

Regarding reverse stock splits, I was always told they failed. But being the skeptic I am and wanting to maybe find "an edge", back in 2013, I back tested data over the prior 20 years to see how they performed after six months post reverse split. My population was all reverse splits on NYSE and NASDAQ over that time period. The results were that 80% of the time the stock's price declined over the subsequent six months. Using this data, you would conclude the odds are very high that they fail. However, in 20% of the cases they were higher. So, it was not foul proof. In the financial markets, nothing is. But if you can find an indicator or event that triggers a specific result 80% of the time, it is invaluable. I have not updated the data since 2013, so, I don't know what the past seven year's failure rate is.

I did not update it, as I no longer short individual stocks, preferring instead to use put options when I am bearish. This controls your risk as the loss is finite. When you short individual issues, your potential loss is infinite. Practically, you would never blow up that badly as your broker would sell you out. But I eventually concluded it was not a sound idea to short individual issues.  

[Troll]

20 hours ago, imaGoodBoyNow said:

 

😐 😐 so I sold my stocks and ACB stock went up %70 this morning lol 😂 fuck me right 

I Thought you sold your junk....🙄

So what are you doing ....looking 👀...

...at junk now?

🤔

[imaGoodBoyNow]

4 hours ago, Troll said:

I Thought you sold your junk....🙄

So what are you doing ....looking 👀...

...at junk now?

🤔

Lol alright detective.. I wasn’t looking,

 

on my ticker it shows the days top stock gainer in the market and guess who popped up

[FootballGuy]

What are some good stocks to invest in right now? I know Visa, Disney and Aurora Cannabis are some good stocks to invest in right now, but I need some more. What y'all got for me? 

[DarterBlue]

9 minutes ago, FootballGuy said:

What are some good stocks to invest in right now? I know Visa, Disney and Aurora Cannabis are some good stocks to invest in right now, but I need some more. What y'all got for me? 

It does not work that way. To successfully invest or trade, you got to screen your own ideas based on your specific objectives and tolerance for risk. Using the tips of others generally results in personal ruin. For the past six weeks I have posted my trades. But they are accompanied by the caveat that these don't represent recommendations. I could never recommend anything to individuals when I don't know what their objectives, experience and capital available to trade is. That would be rank recklessness. 

[imaGoodBoyNow]

19 minutes ago, FootballGuy said:

What are some good stocks to invest in right now? I know Visa, Disney and Aurora Cannabis are some good stocks to invest in right now, but I need some more. What y'all got for me? 

Are you new? What types of trading do you do?

 

 

because all this time I thought stock market was buy stocks for low and sell when their high but now I realized their so many different ways to invest 

[FootballGuy]

1 hour ago, imaGoodBoyNow said:

Are you new? What types of trading do you do?

 

 

because all this time I thought stock market was buy stocks for low and sell when their high but now I realized their so many different ways to invest 

Yeah I'm new to the game. I've been playing around with the robinhood app lately. I do the options trading by the way. 

[FootballGuy]

1 hour ago, DarterBlue said:

It does not work that way. To successfully invest or trade, you got to screen your own ideas based on your specific objectives and tolerance for risk. Using the tips of others generally results in personal ruin. For the past six weeks I have posted my trades. But they are accompanied by the caveat that these don't represent recommendations. I could never recommend anything to individuals when I don't know what their objectives, experience and capital available to trade is. That would be rank recklessness. 

Understood. Just like most people, I'm trying to invest for the long run, but for now, I'd like to invest for short term gains. I'm trying to build an empire over here. I am new to the game, but this is something that I'm trying to make more money off of.