|
|
us stock market, understanding the stock market
Begin Part 2 of 2
ONLINE SEMINARS LIVE OR NOW ON CD!!
To take advantage of market direction and trends, to underdstand why the market moves as it doess, and knowing how to turn up or down cycles to your money making advantage, you need to have the knowledge of what to do and the confidence to do it. Our seminars take you step by step through what drives the market up and down, how to recognize when change is occurring and when you should act, and how you to invest to take advantage of that knowledge. We don't really care which way the market goes, we just want to be able to recognize it and then take advantage of it with stocks, options, or both. Our seminar series shows how to put practical understanding of the stock market to use to make monthly income and build (rebuild) retirements and college funds. There is an incredible wealth of knowledge, years of experience, and 'how to' plans of action in these seminars. As one graduate put it, "I had no idea how little I knew about market direction and the reasons behind it until I took your course." Our graduates over the past year and one-half have made the bear market in stocks their own private second bull market because they learned how to and when to enter the downside and make dramatic profit from what most investors dread. Have the knowledge to take advantage of any kind of market as well as the confidence to act when you see the action unfold. We cover it all from trends, to accumulation/distribution, patterns, stocks, buying and selling options naked, covered, or creating spreads. Go to
http://www.stockseminarsonline.com
and look for the link to the CD seminars or the next live series dates where you can learn and ask questions from the comfort of your home without having to incurr costly travel expenses and time away from work, costs and time that very few can deduct from their taxes . This is Jon Johnson's internet site for online seminars and they get you up to speed on how to deal with up or down markets. Hope you check it out.
SUBSCRIBER QUESTIONS
Q: I bought 100 September 35 C puts at $1.25 back when C hit $36.01. Even though you indicated a put buy on C around $30, I sold my position at $2.15. Do you know these options actually hit a high of $11.00 at one point after that! I would like to know from an obvious expert, you, how do you hold onto the bloody end? I took a $10,000 profit but missed another $90,000! Am I a chicken, normal or just too emotional to play this game? Do you ever "get nervous" and sell out too soon? You held your C position I see, but what happened to me?
A: Everyone, regardless of who they are and years of experience, gets some nerves every once in awhile on a play. The key is sticking with the trend in place or the move you are investing in and looking at the signals from the market as it moves up and down and the stock as it does the same to see if the trend is changing. If you have confidence in your understanding of the market by reading the signposts then you have confidence to stay in the play and reap the big profits. It takes discipline, becoming that machine to act when it is necessary to act but not to have 'happy feet' and jump out of positions too fast. It is definitely a learned trait; you have to force yourself to stick by your plan as long as an honest evaluation of the conditions tells you the trend is still in place. Try this: ask yourself 'are all the attributes I looked for when I entered this play still in place?' If so, there is no real reason to get out. With options you have the time consideration as well; as long as your time on your options is still good you can stick with the play.
THE PLAYS:
Friday plays:
COO: Was rolling well but reversed on higher volume as the selling got worse.
AMGP: Huge move up.
GE: Huge gap down.
Best Plays:
1) DL: Could be forming a handle here after the strong move; excellent accumulation.
2) STE: Making the breakout move.
3) MRK: Rolling over.
4) Continuing: CARS still looks promising. SY looks ready to fall.
NEW PLAYS:
Upside:
DL (Dial Corp.--$21.60; -0.07; optionable): Don't you wish everyone used it?
http://biz.yahoo.com/p/d/dl.html
STATUS: Cup (w/handle?). DL is moving in a 4.5-month cup base, and after a very strong move off of the 50 day MVA Tuesday, DL took a rest Friday, showing a tight doji on lower volume. This could be where it starts to form a handle in the pattern. Accumulation is solid at 7 up weeks on rising volume to 3 down weeks on rising volume. Relative strength is also breaking out on the move. Consumer products had a very rough end of the week but DL held up extraordinarily well. The good accumulation is supporting it. Now we let the stock form the handle over what could be some rough sessions for the overall market early in the week and then attempt the breakout. As you have seen of late, the stronger stocks are holding up when the rest of the market sells off, putting the last touches on their bases. Then when the market rallies again they are ready to make the breakout moves. We will see if DL is that caliber as well. Thus far it has the credentials.
Volume: 614.6K Avg Volume: 609.531K
BUY POINT: $21.84 Volume=712K Target=$25.55 Stop=$20.31
POSITION: DL AD - Jan. $20c (74 delta) and/or Stock
http://www.investmenthouse.com/cd/dl.html
Revisited:
Play Date: 09/28/2002
STE (Steris--$23.75; +1.37; optionable): Medical appliances
http://biz.yahoo.com/p/s/ste.html
STATUS: Breaking out of cup w/handle. That comment about being left at the alter must have been it. After a shakeout down to the 50 day MVA, STE recovered and then broke out on huge volume Friday as the rest of the market sold. That old medical sector as a haven attitude in a weaker market. This stock has very good accumulation at 6 up weeks on rising volume to 2 down weeks on rising volume during the 5-month pattern. Still a buy here.
Volume: 981.1K Avg Volume: 498.831K
BUY POINT: $23.95 Volume=711K Target=$27.75 Stop=$22.12
POSITION: STE LD - Dec. $20c (78 delta) or STE CD - Mar. $20c (72 delta) and/or Stock
http://www.investmenthouse.com/cd/ste.html
Downside:
$OEX (S&P 100 options 413.22; =15.29; optionable)
http://biz.yahoo.com/p/$/$oex.html
STATUS: Put. The 10 day MVA proved much to much for the large caps and turned it Friday. Volume was not horrid, but these rollovers from resistance in a downtrend don't need a lot of volume to start. The selling was steady, and without some really positive news the next leg down in this downtrend is underway. We are looking at a conservative target first as we want to see how the OEX handles the July closing low (396.75). The intraday low was all the way down to 385, so if stocks are tumbling at the target we will let it continue lower.
Volume: 8.793M
BUY POINT: $411 Target=$395 Stop=$415
POSITION: OXB WC - Nov. $415p (-46 delta) or OXB JC - Oct. $415p (-48 delta)
http://www.investmenthouse.com/cd/$oex.html
MRK (Merck & Co.--$46.26; -2.49; optionable): Drug manufacturer
http://biz.yahoo.com/p/m/mrk.html
STATUS: Put. Just goes to show that not all medical sectors are strong. Drugs are mixed; some are up well, others are down hard. MRK is going down. It rallied up to the 50 day MVA Tuesday through Thursday (54.31) but Friday rolled over at that level on rising, above average volume. The options are not very expensive and the deltas are good. Looking for a roll back down .
Volume: 7.587M Avg Volume: 7.39M
BUY POINT: $46.08 Volume=7M Target=$43.75 Stop=$48.65
POSITION: MRK WJ - Nov. $50 put (-71 delta)
http://www.investmenthouse.com/cd/mrk.html
MEMBER PORTFOLIO: CUB, EBAY, HOTT; LOW, NOC, PG, QLGC, RCII, SRCL, WM
These are the stocks that our subscribers vote to put in a 'portfolio' to track their progress and comment upon when they reach buy points, sell points, or levels to write some covered calls on. They are not covered every report, but when something interesting is developing we take note.
CUB 09/18 Put 18.06 -1.19 18.98 16 49K 85K 21
Current. It was ready to roll back down. Turned from the 18 day MVA and fell hard to the 18 day MVA. This is its critical point it needs to break.
NOC 07/06 Test 50 126.76 0 0 0 1.1M 1.7M 0
A nice consolidation above the 18 day MVA after the July plunge. The high is near 130, and a break over that is a buy point.
CONTINUING/WATCHLIST: These are stocks that are current plays (the buy point hit), waiting for the buy point to be hit (buy not hit), or buy not made for various reasons (buy alert not issued). The date references the date the play first appeared on the report. Pivot is the buy point.
Stock Date Play Close +/- Pivot Tgt Vol TgtV Stop
$OEX 09/28 Put 413.22 -15.29 411 395 8.8M 0 415
New.
$OEX 09/21 BO 413.22 -15.29 424.45 438 8.8M 0 419
As indicated Thursday, when the market could not make the move toward the 18 day so it was time to take the money off the table.
ADLR 09/21 cup hdl 14 +0.09 14.74 17.74 123K 161K 13.65
Buy not hit. Still very solid in the pattern, showing a doji on the 18 day MVA.
AEM 09/19 cup hdl 15.68 +0.03 17.05 20.55 994K 1.2M 15.75
Buy not hit. Not really doing it. Not enjoying the good Friday most stocks had.
ALLY 09/07 cup hdl 15.62 -0.28 15.86 18.25 291K 675K 14.55
Current. Low volume, holding 15.50.
AMGP 08/28 cup hdl 33.3 +1.81 30.32 34.94 746K 350K 28.65
Current. It was ready to move higher, gapping up on huge volume.
CARS 08/30 cup hdl 25.03 -0.09 25.18 28.95 101K 400K 23.42
Buy not issued. Still looking solid in the pattern, fighting of the market selling and holding above the 10 day MVA.
CCCG 09/12 Cup 12.9 -0.27 13.45 16.15 88K 51K 12.41
Current. Tsting the 18 day MVA, but volume shot up. Must hold here on the close.
COH 08/22 cup hdl 27.11 -0.98 27.55 33 668K 1.4M 28
COH 08/13 BO 27.11 -0.98 25.55 30 668K 1.4M 28
Current. Still testing the 50 day MVA in what looks like a decent handle formation.
COO 09/26 cup hdl 52.59 -1.21 54 61 520K 375K 50.22
Current. Hit the buy on some good volume but then reversed and closed down on the session. Managed to hold the 10 day MVA, but do not like reversal action.
CUB 09/18 Put 18.06 -1.19 18.98 16 49K 85K 21
Current. It was ready to roll back down. Turned from the 18 day MVA and fell hard to the 18 day MVA. This is its critical point it needs to break.
CVTX 09/24 Put 20.75 -0.42 19.65 16 353K 750K 21.25
Buy not issued. Closed on the 10 day MVA. Needs to break 20 on volume to enter.
DL 09/28 cup hdl 21.6 -0.07 21.84 25.55 615K 712K 20.31
New.
GE 09/26 Put 24.47 -1.92 26.25 24 55M 35M 27.85
Tanked hard as anticipated.
GLG 09/18 cup hdl 9.52 +0.16 10.59 12.75 627K 1.3M 9.45
Buy not hit. Held the 50 day MVA, but on very low volume.
HOTT 07/06 Test 50 19.2 -0.8 0 0 677K 1M 0
JP 08/30 Put 40.21 -1.04 41.72 38.55 491K 700K 41.35
Current. Turned over at the down trendline on rising volume.
KKD 09/21 Put 30.3 -1.78 32.4 29.65 852K 875K 33.75
Current. Turned over at the 10 day MVA on rising volume. May let it run past the target toward 29.
LBIX 09/25 Cup 2.79 -0.11 2.95 4 27K 150K 2.45
Current. Testing the solid move. May form a handle here. Very nice low volume.
LOW 07/06 Test 50 42.48 -1.17 0 0 6M 0 0
MRK 09/28 Put 46.26 -2.49 46.08 43.75 7.6M 7M 48.65
New.
NCC 09/17 Put 28.43 -0.75 28.96 25.95 1.1M 14M 29.75
Current. Turned over at the 18 day MVA and down on lower voume.
NOC 07/06 Test 50 126.76 0 0 0 1.1M 1.7M 0
OVER 09/24 Rolling 22.02 +0.33 21.11 24.25 1.8M 2M 20.95
Current. Blasted over the 50 day MVA but could not hold the move. Still okay, but has to hold here.
PETM 08/26 cup hdl 17.89 -0.67 17.04 20.45 1.4M 2.8M 17.25
Current. Holding the 18 day MVA after a lower high. Be very careful here. Volume has not been good on the recent moves.
PG 09/21 Test 18 88.13 -2.62 91.55 103 4.4M 5.5M 89.45
QLGC 08/17 CCall 26.96 +0.38 36.48 0 17M 12M 33.55
Current. Hung on Friday on decent volume.
RCII 08/24 Test 18 51.97 -0.04 58.02 66.45 937K 701K 53.96
RFMD 09/05 Test 18 6.37 +0.09 6.08 9 6.1M 9.5M 5.65
Current. Not bad. Holding the 10 day MVA on much lower volume.
SCSS 09/21 cup hdl 6.19 +0.04 6.02 7.25 485K 200K 5.61
Current. Stalling out some with a doji on high volume.
STE 09/28 BO 23.75 +1.37 23.95 27.75 981K 711K 22.12
Blasting higher on strong volume.
SWFT 09/25 Test 18 16.84 -1.06 17.4 19 750K 600K 16.35
Current. Rolled over hard from 18 as volume rose. Not looking good real fast.
SY 09/19 Put 11.92 -0.32 12.75 10 436K 680K 13.55
Buy not issued. Looks ready to make the plunge.
TT 09/19 cup hdl 13.49 -0.01 13.71 16.55 4.4K 50K 12.71
Buy not hit. Still moving laterally below 13.50 on lower and lower volume.
UPC 09/17 Put 27.4 -1.04 28.32 26 609K 615K 28.95
Current. Tested the 18 day MVA and turned over big.
VMI 09/10 BO 23.15 -0.7 24.23 26.85 30K 120K 22.53
VMI 08/30 BO 23.15 -0.7 22.38 26.85 30K 120K 23
Current. Faded below the 18 day MVA on continued below average volume, but it has made a lower high here. Not in a lot of trouble, but we did not anticipate another test of the 50 day MVA (22.50) so fast.
VRTS 08/19 CCall 15.12 +0.01 19.76 20 12M 8.5M 17.45
Current. Tried the 18 day MVA Friday but could not hold the move.
VWKS 08/30 cup hdl 7.99 +0.04 8.45 10.25 214K 890K 7.86
Buy not issued. Looks very solid, showing good action in this long handle.
WB 09/25 Put 32.97 -0.85 33.25 30 3.3M 4M 34.15
Current. This was a bonus for the alert subscribers Friday. Saw it rolling over at the 18 day MVA on rising volume.
WEN 09/21 Put 34.4 -0.29 32.75 30 1.3M 1.6M 33.33
Current. Almost exited, but WEN could not take out the 50 day and then rolled back to close below the 200 day. We will give it another chance to fall to get us a better exit point.
Good Investing!
Jon L. Johnson and The Daily Staff
All of the foregoing is commentary for informational purposes only. All statements and expressions are the opinion of Online Investment Services, LP or its paid consultants and are not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on our related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolio of Partners of Online Investment Services, LP or its paid consultants may, in some instances, include securities mentioned herein and on our web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors.
|
us stock market
understanding the stock market
|
